- 9 -- 9 -
were recourse but that the recourse portion of the notes was only
due after the nonrecourse portion, 90 percent, was paid in full.
All of the monthly payments required among the entities in
the above transactions offset each other. These transactions
were done simultaneously. Although the recyclers were sold and
leased for the above amounts under the structure of simultaneous
transactions, the fair market value of a Sentinel EPE recycler in
1981 and 1982 was not in excess of $50,000.
PI allegedly sublicensed the recyclers to entities that
would use them to recycle plastic scrap. The sublicense
agreements provided that the end-users would transfer to PI 100
percent of the recycled scrap in exchange for a payment from FMEC
Corp. based on the quality and amount of recycled scrap.
Like Clearwater, each of the Partnerships leased Sentinel
EPE recyclers from F & G Corp. and licensed those recyclers to
FMEC Corp. The transactions of the Partnerships differ from the
underlying transactions in the Provizer case in the following
respects: (1) The entity that leased the machines from F & G
Corp. and licensed them to FMEC Corp., and (2) the number of
machines sold, leased, licensed, and sublicensed. SAB Recovery
and SAB Recycling each leased and licensed seven Sentinel EPE
recyclers. SAB Reclamation was to lease and license eight
recyclers, according to its offering memorandum, but the SAB
Reclamation partnership tax return for 1982 indicates that it
leased and licensed only four recyclers.
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