John Sann and Marianne Sann, et al. - Page 9

                                        - 9 -                                         
          for the above amounts under the structure of simultaneous                   
          transactions, the fair market value of a Sentinel EPE recycler in           
          1981 and up to the end of 1982 was not in excess of $50,000.                
               PI allegedly sublicensed the recyclers to entities that                
          would use them to recycle plastic scrap.  The sublicense                    
          agreements provided that the end-users would transfer to PI 100             
          percent of the recycled scrap in exchange for a payment from FMEC           
          Corp. based on the quality and amount of recycled scrap.                    
               Like Clearwater, Empire and Plymouth leased Sentinel EPE               
          recyclers from F & G Corp. and licensed those recyclers to FMEC             
          Corp.  The Empire and Plymouth transactions differ from the                 
          underlying transactions in the Provizer case in two respects:               
          (1) The entity that leased the machines from F & G Corp. and                
          licensed them to FMEC Corp.; and (2) the circumstance that seven            
          machines were sold, leased, licensed, and sublicensed by Empire             
          and Plymouth.  Foam leased four Sentinel EPE recyclers from F & G           
          Corp., but it did not license them to FMEC.  Instead, in its                
          fourth transaction, Foam entered into (1) a 1-year consulting               
          agreement with the president of PI, John D. Bambara (Bambara),              
          who was to assist in the placement of the machines with end-                
          users, and (2) a joint venture agreement with PI for the further            
          processing and sale of the output of the Sentinel EPE recyclers.            
               For convenience, we refer to the series of transactions                
          among PI, ECI Corp., F & G Corp., each of the Partnerships, FMEC            
          Corp. or Bambara, and PI as the Partnership transactions.  In               

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011