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learn or properly evaluate important facts about Resource or the
Plastics Recycling transactions in general that were disclosed in
the offering memorandum, we are not convinced that he carefully
reviewed the offering memorandum, or that he placed a great deal
of reliance, if any, upon the representations therein.
The Resource offering memorandum disclosed 8 tax and 12
business risk factors associated with an investment in Resource.
With respect to the opinion letter of counsel, the offering
memorandum stressed that "prospective investors are not permitted
to rely upon the advice contained therein", and that "OFFEREES
MUST RELY UPON THEIR OWN PROFESSIONAL ADVISERS WITH RESPECT TO
THE TAX BENEFITS AND TAX RISKS RELATING TO AN INVESTMENT IN THE
PARTNERSHIP." The offering memorandum also warned that there was
a substantial likelihood of audit and that "THE PURCHASE PRICE OF
THE SENTINEL RECYCLERS TO BE PAID BY F & G [CORP.] * * * WILL
PROBABLY BE CHALLENGED * * * AS BEING IN EXCESS OF THE FAIR
MARKET VALUE THEREOF". The import of this particular tax risk
factor was explained in the next paragraph as follows: "Such
purchase price is the basis for computing the regular investment
and energy tax credits to be claimed by the Partnership."
Among the disclosed business risk factors were the
following: (1) The Partnership had no operating history; (2)
management of the Partnership's business was dependent upon the
general partner, who had no experience in marketing recycling
equipment and who was required to devote only such time to the
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