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he was the most knowledgeable person regarding VARI and that
respondent’s projection, based on an interview with Mr. Rhoads,
is therefore erroneous. We disagree for several reasons.
First, respondent’s reliance on Mr. Rhoads’s statements was
not improper. Mr. Rhoads had daily contact with ZSI and was
intimately involved with the presorting division’s operations; we
do not think it improbable that Mr. Rhoads was aware of those
factors impacting the presorting division’s profitability, not
the least of which was the amount of retained VARI.
Second, respondent’s projection coincides with the most
objective and reliable evidence in the record--the presorting
discount. ZSI saved 4 cents per piece of mail under the
presorting discount program and consistently has been able to
retain the benefits from 50 percent of that discount. We have
seen no evidence to suggest the apportionment of the presorting
discount is distinguishable from the apportionment of the VARI.
Third, and most importantly, petitioner’s projection is
unreliable and lacks probative value.11 Petitioner’s bald
projection of $350,000 does not appear to be based on any
evidence or knowledge personal to petitioner. Although
petitioner generally dealt with ZSI’s creditors and financial
11At trial, petitioner testified that he had estimated ZSI
would retain anywhere from 25 percent to 35 percent of VARI but
offered the Court no facts on which to evaluate the
reasonableness of his estimates.
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