Stuart A. and Harriet J. Gollin, et al. - Page 52

                                       - 52 -- 52 -                                        
          Recycling offering memorandum from a legal standpoint.  He did              
          not consider Cohen to be an engineer or an expert in plastics               
          recycling.  Cohen indicated that he had invested in a 1981                  
          Plastics Recycling transaction, and he agreed to compare the two            
          offering memoranda.  Fredericks understood from Cohen that the              
          two transactions were virtually the same and that the investment            
          offered good tax advantages.  He did not ask Cohen whether he had           
          received any royalties.                                                     
               Porter was a licensed engineer and the president and                   
          principal stockholder of PDE, a plastics molding company for                
          which Fredericks was a director.  Fredericks knew that PDE had              
          been recycling plastic scrap since the late 1970's.  After                  
          reviewing the SAB Recycling offering memorandum, Fredericks                 
          telephoned Porter and asked him if there was any economic value             
          in a machine that recycles polyethylene or one that recycles                
          polystyrene.  According to Fredericks, Porter believed that                 
          recycling was economically viable depending upon the price of               
          oil.  Fredericks did not inform or question Porter about the                
          Plastics Recycling transactions, the Sentinel EPE recycler, or              
          any details of plastics recycling.  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; he did             
          not send Porter a copy of the offering memorandum; and he did not           
          ask Porter if there were any comparable machines already on the             






Page:  Previous  42  43  44  45  46  47  48  49  50  51  52  53  54  55  56  57  58  59  60  61  Next

Last modified: May 25, 2011