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Our third concern with Fishman’s conclusion is that he
reached it by comparing petitioner to four publicly traded
companies none of which was actually comparable to petitioner.
Each company is significantly larger than petitioner, both in
size and in revenue, and none of those companies, unlike
petitioner, is a discount operation that aims to charge less than
a typical retail oil company. The four companies also are
located in different geographical areas than petitioner, have
convenience stores, accept credit card payments, and are more
heavily debt leveraged. Their officers also have significantly
different responsibilities than petitioner’s officers. To be
sure, as Fishman acknowledged in reply to a question from the
Court:
The Court: * * * Now, let’s talk again about
your comparisons to the public companies. And I
understand that in the field of valuation, how one uses
public companies for comparison purposes. But these
companies are a stretch, don’t you think, to try to
substantiate reasonableness of compensation, based on
three top individuals in public companies?
The Witness: * * * I will tell you, are they the
best comparable that I could--they are the best
comparable that I could find. In a perfect world,
would they be the ones that I would rather use? No.
Having rejected Fishman’s conclusion in its entirety, and
having rejected much of his rationale, we now turn to the various
factors on reasonable compensation and analyze them seriatim
through the eyes of a hypothetical independent investor. As to
each factor, we ask ourselves the following question (the
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