- 9 -
the trust department at Bankers Trust, reviewed WMDI's tax
opinion letter contained in the offering memorandum and reported
favorably to Gallagher with respect to the opinion.
Gallagher discussed the Sentinel EPE recycler transactions
with about 11 executives at Ingersoll-Rand. At the behest of
Bennett, Gallagher toured PI's Hyannis plant. Upon his return
from Hyannis, Gallagher reported to the officers at Ingersoll-
Rand and told them that PI was a going concern, that he had seen
the recyclers, and that they were big machines. Gallagher also
submitted a brief handwritten summary to the same effect. He
prefaced his written summary by noting that he did "not have an
engineering background." The summary included a list of six
purported current end-users of recyclers and contained the
following postscript: "If you have any questions or would like
an opportunity to see the equipment in operation, please let me
know." Gallagher made no representations about the uniqueness of
the recyclers.
Neither Gallagher nor Bankers Trust received a commission
from Ingersoll-Rand for the investments in the Plastics Recycling
transactions. However, Gallagher did receive what he admitted
was a "special deal." The typical Plastics Recycling investment
entailed the acquisition of an interest in a partnership which
leased the recyclers. Such an interest sold for a minimum of
$50,000. In December of 1981, however, Gallagher was allowed to
purchase a 10-percent undivided interest directly in a recycler,
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