- 32 -
25 years before discussing the Partnership transactions in 1981.
Snyder claims that Miller told him that his future was invested
in PI. The offering memoranda for SAB Recovery and SAB
Reclamation disclosed that Miller was a 9.1-percent shareholder
of F & G Corp., was employed as corporate counsel to PI, and
represented Raymond Grant, the sole shareholder of ECI Corp.
Each memorandum also noted that "Miller [would] receive
substantial additional compensation for representing PI and FMEC
in connection with" the Partnership transactions. Not
surprisingly, Miller recommended SAB Recovery to Snyder.
Nothing in the records indicates that Miller had any
expertise or knowledge with respect to plastics or plastics
recycling, or that Snyder believed he had any such knowledge or
expertise. There is no showing in the records that Snyder and
Miller had any special or enduring friendship during college or
afterwards; indeed, they had not spoken to each other in nearly
25 years before discussing the Partnership transactions. Given
the extent to which Miller was immersed in the Partnership
transactions, how much he stood to benefit financially, and his
lack of expertise regarding plastics materials and plastics
recycling, we do not find Snyder's purported reliance on Miller
to be reasonable, in good faith, or based upon full disclosure.
See Vojticek v. Commissioner, T.C. Memo. 1995-444, to the effect
that advice from such persons "is better classified as sales
Page: Previous 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 NextLast modified: May 25, 2011