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Myra Harrison could not be replaced at any price.” Following the
remand of this case to us by the United States Court of Appeals
for the Ninth Circuit, petitioner moved the Court to hold an
evidentiary hearing limited to “the external comparison factor of
the Elliotts test”, so that the Court could properly evaluate
that factor. Respondent objected to the motion, and we denied
it. In our order disposing of the motion, we agreed with
respondent that, having eschewed such testimony at trial,
petitioner would not be prejudiced by being denied the
opportunity to supplement the record with additional expert
testimony addressed at external comparisons. We added that
granting the motion would undermine principles of judicial
economy and the need for finality. Finally, we stated that we
were convinced by respondent that he would be prejudiced if
forced to expend additional resources to rebut any additional
testimony.
Petitioner bears the burden of proof, and we have little, if
anything, in the way of guidance from petitioner to aid us in
fixing a number for the reasonable amount of compensation paid to
Mrs. Harrison for the audit years. In its supplemental brief on
remand, petitioner suggests that we adopt the perspective of a
hypothetical independent investor to determine whether such an
investor would be satisfied with his return on equity after the
compensation in issue was paid. See Elliotts, Inc. v.
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Last modified: May 25, 2011