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his visit to PI, the demonstration of the recycler, and his
discussions with various individuals at PI. Stewart advised them
that the operation looked viable because it solved the problem of
plastic disposal, because the recyclers could be used by
companies which did not have to purchase the recyclers, and
because of the effect of rising oil prices on the plastics
industry. The tax benefits of the investment were also
discussed. Stewart informed Gilmore and Wilson that he intended
to make an investment in one of the partnerships, and
subsequently did so. Gilmore and Wilson were aware that Stewart
had no background in plastics recycling, machinery, or materials.
Stewart provided Gilmore and Wilson with Southeast's
offering memorandum. Although Gilmore reviewed the offering
memorandum, he did not read it "cover to cover". Gilmore read
Ulanoff's marketing report and Taggart's tax opinion, and he was
impressed with their credentials. Gilmore made no independent
investigation of the projections in the offering memorandum.
Gilmore did not know the value of the recyclers and was
unfamiliar with nonrecourse notes.
Wilson looked at the offering memorandum and attempted to
understand it to "the best of his ability", although the extent
of his review of the offering memorandum is unclear. Wilson was
not concerned by the warnings on the front page of the offering
memorandum, the conflicts of interest described therein, or the
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