- 37 -
according to Feinberg, Becker complied.10 We already have
established, though, that petitioners may not reasonably rely on
Becker’s advice. Since Cohen and Feinberg themselves lacked the
expertise and knowledge of the pertinent facts to provide
informed advice to petitioner, any advice they gave petitioner
about SAB Foam plainly was of very limited value. See David v.
Commissioner, 43 F.3d 788 (2d Cir. 1995). Cohen and Feinberg
were partners and coinvestors rather than advisers on whom
petitioners could rely with respect to the SAB Foam transactions.
We hold that it was not reasonable for petitioner to rely upon
the advice received from either Cohen or Feinberg.
10 We note that Feinberg testified that the expert opinions
of Ulanoff and Burstein had passed petitioner’s review partly
because of Becker’s representation. With regard to SAB Resource,
petitioner claims that he had instructed Becker to:
go up to Hyannis and make sure that there were machines
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 Feinberg, Becker confirmed that he had performed the
suggested tasks. With regard to SAB Foam, Feinberg testified
that he discussed the valuation with Becker on the same basis as
with the previous transaction (i.e., SAB Resource).
We consider Feinberg’s testimony inconsistent with Becker’s
testimony, and as to this matter we consider Becker’s testimony
reliable and Feinberg’s alleged recollection unreliable. See
supra note 7 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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