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Triemstra had no education or experience in the recycling or
plastics fields.
Triemstra did not investigate PI. He was unaware of the
prevailing price of polyethylene pellets at the time, and he did
not investigate the price of virgin pellets. Triemstra never saw
a Sentinel EPE recycler or asked if he could see one. He never
visited an end-user. Triemstra was unaware of any competing
plastics recyclers and did not investigate the matter.
Cohn learned about the Northeast transaction from Kravitz.
Cohn was provided a copy of the Northeast offering memorandum and
remembers having read the draft legal opinion and the reports of
the evaluators included in the appendices thereto. Cohn
concluded there were no comparable machines solely on the basis
of his reading of the Northeast offering memorandum. Before
investing in Northeast, Cohn contacted Alvin Shapiro (Shapiro), a
C.P.A. who had prepared Cohn's tax returns for many years.
Shapiro told Cohn that he was familiar with the type of
transaction set out in the Northeast offering memorandum and that
Cohn should be careful about the valuation of the Sentinel EPE
recyclers. Shapiro considered valuation to be "the big problem"
with that type of investment.
Cohn had no background in plastics or plastics recycling.
He knew none of the principals at PI and never investigated PI.
Cohn never investigated the price of virgin pellets as compared
with recycled pellets. He never read any periodicals about the
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Last modified: May 25, 2011