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Recycling).3 SAB Recovery and SAB Recycling purported to lease
Sentinel expanded polyethylene (EPE) recyclers. SAB Recovery
also owned interests in two partnerships that purported to lease
Sentinel EPE recyclers, Scarborough Leasing Associates
(Scarborough) and Plymouth Equipment Associates (Plymouth). For
convenience, we refer to these four partnerships collectively as
the Partnerships.
The transactions involving the Sentinel EPE recyclers
purportedly leased by the Partnerships are substantially
identical to those in the Clearwater Group limited partnership
(Clearwater), the partnership considered in Provizer v.
Commissioner, T.C. Memo. 1992-177. Petitioners have stipulated
substantially the same facts concerning the underlying
transactions as we found in the Provizer case.
In the Provizer case, Packaging Industries, Inc. (PI),
manufactured and sold six Sentinel EPE recyclers to ECI Corp. for
$981,000 each. ECI Corp., in turn, resold the recyclers to F & G
Corp. for $1,162,666 each. F & G Corp. then leased the recyclers
to Clearwater, which licensed the recyclers to FMEC Corp., which
sublicensed them back to PI. The sales of the recyclers from PI
to ECI Corp. were financed with nonrecourse notes. Approximately
7 percent of the sales price of the recyclers sold by ECI Corp.
3 The record here does not include copies of the SAB Recovery
and SAB Recycling offering memoranda. For a more detailed
discussion of SAB Recovery and SAB Recycling, see Gollin v.
Commissioner, T.C. Memo. 1996-454.
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