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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.
Although the offering memorandum represented that the
Sentinel EPE recycler was a unique machine, it was not. Several
machines capable of densifying low density materials were already
on the market in 1981. Other plastics recycling machines
available during 1981 ranged in price from $20,000 to $200,000,
including the Foremost Densilator, Nelmor/Weiss Densification
System (Regenolux), Buss-Condux Plastcompactor, and Cumberland
Granulator. See Provizer v. Commissioner, T.C. Memo. 1992-177.
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 Plymouth. He also is a 9-percent
shareholder in F & G Corp., the corporation that leased the
recyclers to Plymouth. From 1982 through 1985, Roberts
maintained the following office address with Raymond Grant
(Grant), the sole owner and president of ECI Corp.:
Grant/Roberts
Investment Banking
Tax Sheltered Investments
745 Fifth Avenue, Suite 410
New York, New York 10022
Grant was instrumental in the hiring of Ulanoff as an evaluator
of the Plastics Recycling transactions; the two had met on a
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