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Despite his lack of knowledge regarding the product, the
target market, and the technical aspects at the heart of the
Plastics Recycling transactions, Becker did not hire an expert in
plastics materials or plastics recycling. The only independent
person having any connection with the plastics industry with whom
Becker spoke was Canno. Canno was part owner and the production
manager of Equitable Bag Co., a manufacturer of paper and plastic
bags. Becker spoke to Canno about the recyclers and PI, but he
did not hire or pay him for any advice. Canno did not visit the
PI plant in Hyannis, see or test a recycler, or see or test any
of the output from a recycler or the recycled resin pellets after
further processing. According to Becker, Canno endorsed the
Plastics Recycling transactions after reviewing the memorandum.
When asked whether Canno had performed any type of comparables
analysis, Becker replied: “I don’t know what Mr. Canno did.”
Becker visited the PI plant in Hyannis, toured the facility,
viewed a recycler in operation, and saw products that were
produced from recycled plastic. Becker claims that PI personnel
told him that the recycler was the only machine of its type. In
fact, the recycler was not unique; instead, as we have found in
many cases involving substantially similar machines, several
comparable machines were available in 1981 and 1982 ranging in
price from $20,000 to $200,000. See, e.g., Provizer v.
Commissioner, T.C. Memo. 1992-177.
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