- 18 -
partnership were dependent on the fair market value of the
recyclers, petitioner should have made inquiries into the value
of the recyclers rather than merely relying on unsubstantiated
conclusions.
Petitioner does not suggest that any of the individuals with
whom he discussed the partnership had any expertise in plastics
or the plastics recycling industry. The expertise of both
Jacobson and petitioner’s law firm associate is in taxation.
Nothing in the record suggests petitioner’s law firm associate
consulted with anyone who had any expertise in plastics or
investigated the partnership beyond looking at materials in the
offering memorandum. The associate’s advice did not go any
further than indicating that the partnership “might have a
supportable tax position” if the facts and circumstances proved
to be as represented in the offering memorandum. Although
Jacobson supposedly visited the Sentinel facility and concluded
that Foam was a viable investment, petitioner has presented no
evidence that Jacobson had any basis from which to draw such a
conclusion.
Freedman’s experience with leveraged leasing does not make
him an expert on plastics. Further, Freedman’s position as an
investor in plastics recycling transactions and as a shareholder
and president of F&G made him an interested party in the
investment at issue. The fact that Freedman introduced the
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011