- 10 - pay “fees of purchaser representatives and selling commissions” from the proceeds of the offering in an amount equal to 10 percent of the aggregate price of the units. Thus, Winer would earn a 10-percent commission upon selling an interest in the partnership. In addition, the offering memorandum stated that Winer could “retain as additional compensation all amounts not paid as purchaser representative fees or sales commissions in connection with the Offering”. The face of the offering memorandum warned, in bold capital letters, that “THIS OFFERING INVOLVES A HIGH DEGREE OF RISK”. The offering memorandum also warned that “An investment in the partnership involves a high degree of business and tax risks and should, therefore, be considered only by persons who have a substantial net worth and substantial present and anticipated income and who can afford to lose all of their cash investment and all or a portion of their anticipated tax benefits.” The offering memorandum went on to enumerate significant business and tax risks associated with an investment in Whitman. Among those risks, the offering memorandum stated: (1) There was a substantial likelihood of audit by the Internal Revenue Service, and the purchase price paid by F&G to ECI might be challenged as being in excess of the fair market value; (2) the partnership had no prior operating history; (3) the management of the partnership’s business would be dependent on the services of thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011