Leo J. Polack - Page 12




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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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