- 23 - particularly the basic sham nature of the transaction, undermines critical aspects of petitioner's testimony and analysis and does not support the conclusions he purportedly reached with respect to the Sentinel EPE recycler and the Northeast transaction. 1. Petitioner's Investigation of the Transaction Was Inadequate The Northeast offering memorandum warned: (1) Northeast had no prior operating history; (2) management of Northeast's business was dependent upon the general partner, who had no prior experience in marketing recycling or similar equipment; (3) the general partner had other business commitments that required a substantial portion of his time; (4) the general partner was required to devote only such time to Northeast as he, in his absolute discretion, deemed necessary; (5) the limited partners had no control over the conduct of Northeast's business; and (6) there was no established market for the Sentinel EPE recyclers. In addition, PI faced added costs because it shipped resin by truck instead of rail, and because PI was in an inconvenient location with high costs for supplies. To some extent these added costs were offset by a volume discount PI purportedly received on its resin purchases. However, Bambara did not tell petitioner the amount of the discount, nor, for that matter, did he tell petitioner how much PI paid in added costs as a "location differential". The PI representatives refused to provide petitioner with any of the records or information that he requested, ostensibly because hePage: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Next
Last modified: May 25, 2011