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Corp. based on the quality and amount of recycled scrap. Neither
PI nor the end-users carried out the terms of the sublicense
faithfully. In practice, those terms regularly were ignored.
Both Clearwater and Northeast leased Sentinel EPE recyclers
from F & G Corp. and licensed those recyclers to FMEC Corp.
Apart from leasing and licensing seven recyclers instead of six,
the underlying transactions involving Northeast do not differ in
any substantive respect from the Clearwater transactions
considered in the Provizer case.
For convenience, we refer to the series of transactions
among PI, ECI Corp., F & G Corp., Northeast, FMEC Corp., and PI
as the Northeast transactions. In addition to the Northeast
transactions, a number of other limited partnerships entered into
transactions similar to the Northeast transactions, also
involving Sentinel EPE recyclers and Sentinel expanded
polystyrene (EPS) recyclers. We refer to these collectively as
the Plastics Recycling transactions.
B. Northeast Resource Recovery Associates
Northeast is a New York limited partnership that closed on
October 7, 1981. Richard Roberts (Roberts) is the general
partner of Northeast.
A private placement memorandum for Northeast was distributed
to potential limited partners. Reports by F & G Corp.'s
evaluators, Dr. Stanley M. Ulanoff (Ulanoff), a marketing
consultant, and Dr. Samuel Z. Burstein (Burstein), a mathematics
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