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per unit. Each unit consisted of a cash downpayment of $2,500
and a non-interest-bearing promissory note in the principal
amount of $5,980 payable in 10 annual installments with an
acceleration provision in case of default. Subscription
agreements, which included the promissory note, were signed by
each limited partner and obliged him to make these payments.
Kellen never took any action in a State or Federal court to
enforce the promissory notes against the limited partners of Utah
I who defaulted. The offering was limited to investors with a
net worth (exclusive of home, furnishings, and automobiles) of
$150,000, or investors whose net worth was $50,000 (exclusive of
home, furnishings, and automobiles) and who anticipated that for
the taxable year of the investment they would have gross income
equal to $65,000, or taxable income, a portion of which, but for
tax-advantaged investments, would be subject to a Federal income
tax rate of 50 percent. Each limited partner also was required
to execute a limited guaranty agreement in which he guaranteed a
proportionate share of partnership debt to U.S. Agri. The Utah I
partnership was formed with subscriptions for 247 units for a
total capitalization of $2,094,560, which facilitated farming
operations on 80 acres of real property located in the environs
of Desert Center, California, for a period of approximately 4
years.
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Last modified: May 25, 2011