- 10 - their discussions of tax advantages, risk of audit, and risk of litigation in the Tax Court, would have alerted a prudent and reasonable investor to the questionable nature of the promised deductions and investment tax credits. To be sure, although the first page of the prospectus refers to an "exciting business opportunity while taking advantage of current tax laws," it mentions very little about that opportunity. Instead, it heavily emphasized the benefits derived from the investment tax credit. Encore's prospectus in substance contains only one page that discusses the Gospel record market. That discussion lacks the slightest degree of specificity and is otherwise presented in very general terms. Further, the prospectus does not specifically address the master recordings leased by Encore, the quality of such recordings, nor any other facets of the Encore program. Although the prospectus contains a section entitled “How Our Program Works,” that section is a single page in length and contains a mere four paragraphs. Three paragraphs are devoted to the tax aspects of the program, while one paragraph refers to the lease agreement. The remainder of the page outlines in tabular form the amount of advance payment required from the lessee and the amount of investment tax credit passed through to the lessee. The "Financial Section" of the prospectus contains two paragraphs and discusses the investment tax credit available with respect to the sound recordings and computer software. There isPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011