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pellets; and (7) certain potential conflicts of interest existed.
In addition, the private offering memorandum included a provision
stating:
The offer and sale of units is being made in
reliance upon exemptions from registration under
Federal and state securities laws. However, neither
the Securities and Exchange Commission nor any other
Federal or state government agency or self-regulatory
body has approved or disapproved the securities offered
hereby or passed upon the accuracy or adequacy of this
memorandum.
The private offering memorandum for Clearwater also stated
that each limited partner should have a minimum net worth
(exclusive of his principal home, furnishings, and automobiles)
in the amount of $200,000 per limited partnership unit. In
addition, each partner was required to have enough income during
1981 to place the limited partner in at least the 50-percent
income tax bracket. The private offering memorandum also stated
that the projected tax benefits for the initial year of
investment for an investor contributing $50,000 would be
investment and energy tax credits in the aggregate amount of
$86,328, plus partnership loss deductions in the amount of
$39,399.
Reports by Samuel Z. Burstein (Burstein) and Stanley Ulanoff
(Ulanoff), the "F&G evaluators", were included in the private
offering memorandum. As indicated in their reports, neither
Burstein nor Ulanoff was an expert in plastics or plastics
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