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PI's Hyannis plant, neither of them was qualified to analyze or
assess the machines on display. In each of these cases,
petitioners' argument is that they put complete faith in Bachmann
or Greene. Given the technical nature of these investment
ventures, it was unreasonable for them to do so.
Reimann did little more than speak with the accountants at
Bachmann, Schwartz before investing in Scarborough. He received
a copy of the offering memorandum and attended an introductory
meeting at the offices of Bachmann, Schwartz. Reimann recalled
that at the meeting, Bachmann explained the Scarborough
transaction and described his and Abramson's visit to PI.
Reimann described his impressions as follows:
I remember I was quite in awe of this huge office, huge
conference room * * * [The facilities] * * * were
extremely impressive, to say the least. I had never
been in that kind of situation before. There's this
huge conference table and a lot of people -- I presume
most of them were partners and they were all basically
giving me this wonderful advice.
The "wonderful advice" to which Reimann refers, of course, was
the suggestion that he invest in the unsuccessful Plastics
Recycling deal. Reimann testified that he read the offering
memorandum, but did not focus on the warnings or caveats
contained therein. At trial he could not recall the warning that
the IRS might challenge the value of the recycler. Reimann spent
only enough time reading the offering memorandum "to get the gist
8(...continued)
to a cousin about the recycler or that the cousin was qualified
to evaluate it. Moreover, the record does not disclose the
cousin's opinion of the recycler.
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