- 30 -
Burstein was a client of Miller’s and was not an independent
expert.
Becker further explained in his testimony that in the course
of his practice when evaluating prospective investments for
clients, he focuses on the economics of the transaction and
investigates whether there is a need or market for the product or
service. The records indicate, though, that Becker overlooked
several red flags regarding the economic viability of and market
for the recyclers. The memorandum warned that there was no
established market for the recyclers. Becker never saw any
marketing plans for selling the pellets (the product of the
recyclers) or leasing the recyclers. He accepted representations
by PI personnel that they would be marketing the recyclers to
clients and that there was a sufficient base of end-users for the
machines; yet he never saw PI’s client list. At the time of the
closing of the various partnerships, Becker did not know who the
end-users were or whether there were any end-users actually
committed to the transaction.
Becker purportedly checked the price of the pellets by
reading trade journals of the plastics industry. He did not,
however, use those same journals to investigate the recyclers’
purported value. In concluding that the SAB partnerships would
be economically profitable, Becker made two assumptions that he
concedes were unsupported by any hard data: (1) That there was a
Page: Previous 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 NextLast modified: May 25, 2011