- 32 -
persuasive evidence that the so-called oil crisis had a
substantial bearing on petitioners' decisions to invest. While
EOR was, according to our Krause opinion, in the forefront of
national policy and the media during the late 1970's and 1980's,
there is no showing in these records that the so-called energy
crisis would provide a reasonable basis for petitioners'
investing in recycling of polyethylene, particularly in the
machinery here in question.
In addition, the taxpayers in the Krause case were
experienced in or investigated the oil industry and EOR
technology specifically. One of the taxpayers in the Krause case
undertook significant investigation of the proposed investment
including researching EOR technology. The other taxpayer was a
geological and mining engineer whose work included research of
oil recovery methods and who hired an independent geologic
engineer to review the offering materials. Id. at 166. In the
present cases, petitioners were not experienced or educated in
plastics recycling, and they did not independently investigate
the Sentinel recyclers or hire an expert in plastics to evaluate
the Partnership transactions. We consider petitioners' arguments
with respect to the Krause case inapplicable.
2. Petitioners' Purported Reliance on Advisers
Petitioners contend that they reasonably relied upon Alter
and Feinstein as qualified advisers on this matter.
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