H. Robert Feinberg - Page 33

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               The purported value of the recyclers generated the                     
          deductions and credits in this case, and that circumstance was              
          clearly reflected in the memorandum.  Certainly Becker recognized           
          the nature of the tax benefits and, given his education and                 
          experience, petitioner should have recognized it as well.  Yet              
          neither petitioner nor Becker verified the purported value of the           
          recyclers.  Becker confirmed in his testimony incorporated in               
          this record by stipulation that he relied on PI for the value of            
          the recyclers.  An investor as sophisticated as petitioner either           
          learned or should have learned the source and shortcomings of               
          Becker’s valuation information when Becker reported to him and              
          “precisely” disclosed “what [he] had done to investigate or                 




               11(...continued)                                                       
               there, that there were orders for machines there, that                 
               the machines were producing product of the type that                   
               were described in the expert opinions as to what the                   
               machines were supposed to generate, or at least                        
               appeared to do that, and to see if there was some                      
               reasonable relationship to justify the price of the                    
               machine. [Emphasis added.].                                            
          According to petitioner, Becker confirmed that he had performed             
          the suggested tasks.  With regard to SAB Foam, petitioner                   
          testified that he discussed the valuation with Becker on the same           
          basis as with the previous transaction (i.e., SAB Resource).                
               We consider petitioner’s testimony inconsistent with                   
          Becker’s testimony, and as to this matter we consider Becker’s              
          testimony reliable and petitioner’s alleged recollection                    
          unreliable.  See supra note 10 to the effect that this problem              
          was known to petitioner and his counsel, who chose not to call              
          upon Becker for clarifying testimony.                                       





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