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At the time of filing the petition, petitioner resided in
Philadelphia, Pennsylvania.
Petitioner
During 1986 and 1987, petitioner was a managing director of
an investment banking firm (the firm). In August 1986, a major
portion of the firm was sold and, as a result thereof, petitioner
received in excess of $2 million.
Prior to the formation of Ballard Marine, discussed infra,
petitioner did not participate in boating for recreation. He had
no experience as a seaman or with the mechanical operation of
yachts, and he had very little personal experience in boating.
Prior to 1986, he was not a member of any yacht club.
Petitioner became interested in yacht chartering as a result
of his activities in arranging entertainment for clients and
others connected with the firm.
From late 1985 to the middle of 1986, petitioner visited
numerous boat shows. At those boat shows, vendors described
yacht investment plans.
Prior to forming Ballard Marine and causing it to purchase a
boat, petitioner did not prepare a formal business plan. He did
consider the economics of the yacht chartering business, as
follows: He planned to spend approximately $250,000 on a boat.
He believed that many operating costs (e.g., captain, crew, and
fuel) would be paid by the charterer. He assumed that charterers
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