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contacting Samuel Winer (Winer) in connection with a matter
involving a client. Sunbelt is a limited partnership which
purportedly engaged in licensing Sentinel expanded polyethylene
(EPE) recyclers manufactured by Packaging Industries of Hyannis,
Massachusetts (PI). Winer was an investment banker and financial
consultant with offices in Clearwater, Florida. During his
conversation with Winer, Storey became interested in investing in
Sunbelt and asked Winer to send him an offering memorandum.
Aside from being the general partner of Sunbelt, Winer was also
an investor in the project and the general partner in a number of
other plastics recycling limited partnerships including
Clearwater, Poly Reclamation Associates, Southeast Recovery
Associates, and Esplanade Associates. For his services to
Sunbelt, Winer received $60,000 out of the proceeds of the
Sunbelt private offering.
After receiving the offering memorandum,1 Storey read it
thoroughly twice and read portions of it five times. He
considered the offering memorandum to be well prepared, at least
as compared to others that he had read. Storey was skeptical of
representations made in the offering memorandum regarding cash
flow, revenue projections, and tax benefits. He contacted John
Taggart (Taggart) and Elliot Miller (Miller) regarding the tax
1 The offering memorandum for Sunbelt was not made a part
of the record. Instead, the parties stipulated to the offering
memorandum for Clearwater. We assume that the offering memoranda
for Sunbelt and Clearwater are substantially identical.
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Last modified: May 25, 2011