Bernice M. and Stanley M. Ulanoff - Page 9




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          documents for the Partnerships.  Taggert owned a 6.66-percent               
          interest in a second-tier Plastics Recycling partnership.                   
               Robert Gottsegen (Gottsegen) was a businessman active in the           
          plastics industry and a long-time business associate of Bambara.            
          C.   The Private Offering Memoranda                                         
               Plymouth and Taylor each distributed to potential limited              
          partners a private placement memorandum.  Each offering                     
          memorandum listed significant business and tax risk factors                 
          associated with an investment in the particular partnership.                
          Specifically, each offering memorandum stated: (1) There was a              
          substantial likelihood of audit by the Internal Revenue Service             
          (IRS), and the purchase price paid by F&G to ECI probably would             
          be challenged as being in excess of fair market value; (2) the              
          partnership had no prior operating history; (3) the general                 
          partner had no prior experience in marketing recycling or similar           
          equipment; (4) the limited partners would have no control over              
          the conduct of the partnership's business; (5) there was no                 
          established market for the Sentinel recyclers; (6) there were no            
          assurances that market prices for virgin resin would remain at              
          their current costs per pound or that the recycled pellets would            
          be as marketable as virgin pellets; and (7) certain potential               
          conflicts of interest existed.                                              
               The private offering memorandum for Plymouth stated that the           
          projected tax benefits for the initial year of investment for an            
          investor contributing $50,000 would be investment credits and               



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