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(IRS) and the purchase price paid by F & G Corp. to ECI Corp.
probably will be challenged as being in excess of fair market
value;6 (2) the Partnerships have no prior operating history; (3)
the general partner has no prior experience in marketing
recycling equipment and is required to devote only such time to
the Partnerships as he deems necessary; (4) the limited partners
have no control over the conduct of the Partnerships' business;
(5) there is no established market for the Sentinel EPE
recyclers; (6) there are no assurances that market prices for
virgin resin will remain at their current costs per pound or that
the recycled pellets will be as marketable as virgin pellets; and
(7) certain potential conflicts of interest exist. The Foam
offering memorandum also notes that "since August 1981, PI has
become a sublicensee of 104 other Sentinel Recyclers" and that it
has "encountered longer start-up periods than anticipated".
C. Richard Roberts
Roberts is a businessman and the general partner in a number
of limited partnerships that leased and licensed Sentinel EPE
recyclers, including Empire, Plymouth, and Foam. He also is a 9-
percent shareholder in F & G Corp., the corporation that leased
the recyclers to the Partnerships. From 1982 through 1985,
6 The offering memoranda note that "Such purchase price is the
basis for computing the regular investment and energy tax credits
to be claimed by the Partnership."
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