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as 100-percent owner of its stock. Giovannone is executive vice
president of PI and a member of its board of directors.
Giovannone and Bambara advised Storey that the recycler was
unique because no other machine on the market could recycle
plastic. To support their statements, they referred Storey to
the marketing report of Stanley Ulanoff, a marketing consultant
with an interest in two recycling partnerships. The marketing
report was appended to the offering memorandum.
When Storey questioned Bambara about the price of the
recycler, Bambara stated that the recycler was unique and that,
if he were to sell the recycler, he would not sell it for less
than the price in the offering memorandum. However, Storey was
still skeptical about its cost because in his words:
I am not an engineer and it is hard for me to say what
it cost to produce something like that and I couldn't
see the inside of the machine. But I -- it just didn't
look like the cost to produce one would be anything
like the price that was put on them but the value of it
is not the cost to produce it.
I was somewhat at a loss regarding this. * * *
In December 1981, Storey went to Clearwater, Florida, to
meet Winer. Storey and Winer discussed Sunbelt; however, the
substance of any conversation between them is unknown. In
October 1982, Storey traveled to Hyannis with Bill Stewart
(Stewart) to observe a demonstration of another recycler. During
this trip, Storey and Stewart agreed to split the commissions
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