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that the banks reciprocated this interest. Petitioner contends
that he and Mr. Ackerman assumed that the banks wanted to
continue this relationship into the future. Petitioner testified
that to their considerable surprise, the banks elected instead to
exercise their put option.
Petitioner’s claimed understanding of the deal with CDR is
based entirely on his testimony.93 We find Mr. Lerner’s
testimony self-serving, contrived, and ultimately not credible.
The bulk of the evidence in the record contradicts petitioner’s
testimony and his purported understanding.
a. Mr. Lerner’s and Mr. Ackerman’s Backgrounds
As previously noted, as far as the record reveals, Messrs.
Lerner and Ackerman were tax and financial professionals with no
experience in running a film distribution business. Cf.
Ferguson v. Commissioner, 29 F.3d at 102 (citing inexperience of
a partnership’s promoters in the relevant business as one
indicator of lack of economic substance in the partnership).
Although Messrs. Lerner and Ackerman appear to have been the
principal negotiators on behalf of the Safari consortium in its
failed bid to purchase New MGM, we have virtually no information
regarding the companies that joined the Safari consortium or
93 As previously noted, Mr. Ackerman also testified to his
understanding of the CDR transaction, but his testimony was based
on what Mr. Lerner had told him.
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