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"One of the fundamental questions" Maxfield had about the
Plastics Recycling transactions was whether the Sentinel EPE
recycler was overpriced. Notwithstanding his concern, Maxfield
did not consult an independent expert about the machines.
Instead, he relied upon the reports of F & G Corp.'s evaluators,
Burstein and Ulanoff, as confirmation of the machine's purported
value. Maxfield did not know that Burstein and Ulanoff were
investors in the Plastics Recycling transactions. He never spoke
to them and did not ask Roberts or Taggart whether Burstein and
Ulanoff were investors. At a meeting held at Sann & Howe to
discuss the investment, Maxfield mentioned that hiring an
independent expert or appraiser was an option for confirming the
value of the machine. As Maxfield recalled:
I mentioned that specifically, it was [a] possibility,
and they--somebody said, well, who? And I said I
frankly don't know, and I also don't know what the
charge would be, I have no idea.
* * *
I don't believe any of the people at Sann & Howe
actually hired another expert, but I said that's a
possibility.
Maxfield also told the members of Sann & Howe that he considered
the relationship between the value of the recycled pellets and
the price of oil to be a negative aspect of the investment. As
he acknowledged, "I had no training to decide which way the price
of oil was going to go and therefore--so on."
Maxfield never represented to anyone at Sann & Howe that he
was an expert in plastics recycling or engineering. In addition,
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