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EI was formed to acquire limited partnership interests in an
office building in Buffalo, New York (the office building), and a
shopping center in Haslett, Michigan (the shopping center). In
contemplation of these ventures, EI prepared a private placement
memorandum (the original offering memorandum) and distributed it
to potential limited partners. At some time in late 1981, EI
abandoned the contemplated investment in the shopping center and
substituted limited partnership interests in Clearwater and a K-
Mart shopping center in Swansea, Massachusetts (the K-Mart
investment). The revised investment objectives were presented in
a revised offering memorandum (the revised offering memorandum).
The revised offering memorandum indicated that EI intended to
invest in 100 percent of the limited partnership interests in the
office building (10 units), 43.75 percent of the limited
partnership interests in Clearwater (7 units), and 15.625 percent
of the limited partnership interests in the K-Mart investment (2-
1/2 units).
MFA Corp. (MFA) is the ministerial agent for EI. Efron owns
50 percent of the stock of MFA, and REFC owns the remaining 50
percent. The revised offering memorandum provides that Efron, as
general partner of EI, and MFA, as the ministerial agent for EI,
will receive substantial fees, compensation, and profits from EI.
The contemplated payments to MFA include: (1) $100,000 for
supervisory management of the office building and ministerial
fees; (2) $100,000-$125,000 as loan commitment fees; (3) $25,000
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