Malcolm I. Lewin and Trina Lewin - Page 37

                                       - 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.                                                       

Page:  Previous  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  42  43  44  45  46  Next

Last modified: May 25, 2011