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4. Cohen and Lewin
Petitioner also relied upon his partners Cohen and Lewin.13
Cohen’s knowledge of the transaction was derived from his review
of the memorandum and his discussions with Becker. In addition,
Cohen testified that Becker told him he could rely on the
valuations attached to the memorandum.14 We already have
established, though, that petitioner may not reasonably rely on
Becker’s advice. Since Cohen himself lacked the expertise and
knowledge of the pertinent facts to provide informed advice to
petitioner, any advice he gave petitioner about SAB Foam plainly
was of very limited value. See David v. Commissioner, 43 F.3d
788 (2d Cir. 1995). Cohen was a partner and a coinvestor rather
than an adviser on whom petitioner could rely with respect to the
transaction here.
We also hold that it was not reasonable for petitioner to
rely upon the advice received from Lewin. As an associate for
Miller & Summit, Lewin may have learned about business practices
13 Petitioner testified that “there was a very, very close
professional as well as a personal and social relationship among
us” and that they “shared information on a daily basis”.
14 We note that Cohen testified: “I remember we talked
about the valuations that were obtained and I remember him
telling me in words or in substance that I could rely on those
valuations.” We consider Cohen’s testimony inconsistent with
Becker’s testimony, and as to this matter we consider Becker’s
testimony reliable and Cohen’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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