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Petitioner's Evaluation of Mid Continent
Petitioner discussed with Corman the tax benefits he might
receive from Mid Continent and as a result, he expected some
"flow-throughs" of losses and investment tax credits. Petitioner
"read some paperwork" about Mid Continent that included various
forms and reports. At the time of his investment petitioner
received and reviewed a document that bore the title "Terra
Drill". He reviewed a partnership prospectus for Mid Continent,
and he produced at trial a document the first page of which is
numbered "35" and is entitled "Summary of Partnership Agreement".
The second through eleventh and final pages of the document are
numbered "B9" through "B18" and discuss solely tax aspects of the
partnership.
Petitioner also received a subscription agreement for Mid
Continent that he reviewed at the time he purchased his interest
from Fields. Paragraph 2.(k) at page 3 of the four-page
subscription agreement provides in part:
I understand that no state or Federal governmental
authority has made any finding or determination
relating to the fairness for public investment of the
Units in the Partnership and that no state or Federal
governmental authority has recommended or endorsed, or
will recommend or endorse, these Units.
Petitioner was aware that Corman did not have a "vast
knowledge of oil and gas" matters and that Corman's advice on the
Mid Continent partnership was based solely on his reading of the
prospectus.
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