- 27 -- 27 -
telephoned Porter to ask him whether he thought a polyethylene or
polystyrene recycler was viable, and he also called Cohen and
asked him if he would review the transaction. Fredericks
understood from Cohen that Cohen had invested in at least one
plastics recycling partnership in 1981 and that SAB Recycling was
virtually the same. He also understood that Cohen thought it was
a good deal with good tax advantages. Fredericks did not ask
Cohen if he had received any royalty distributions. He did not
consider Cohen to be an engineer or an expert in plastics
recycling. According to Fredericks, Porter thought a
polyethylene or polystyrene recycler was economically viable
depending upon the price of oil. Fredericks did not otherwise
discuss plastics recycling with Porter. He did not inform Porter
of, or ask for his opinion about, the Sentinel EPE recycler or
the Plastics Recycling transactions; he did not send Porter a
copy of the offering memorandum; he did not tell Porter what
machine he was investing in; he did not describe the machine to
Porter; he did not tell Porter the price of the machine; and he
did not ask Porter if there were any comparable machines already
on the market. Porter and Cohen did not testify at the trial in
docket No. 21847-90.
Fredericks next spoke to Becker and Steele about SAB
Recycling. He asked Becker whether he had seen the machines and
if they worked. Becker described his visit to PI and advised
Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 NextLast modified: May 25, 2011