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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 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 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 (6) certain potential conflicts of interest
existed.
The offering memorandum informed investors that the
Dickinson transactions would be executed simultaneously.
The offering memorandum prominently touted the anticipated
tax benefits for the initial year of investment for an investor
in the partnership. In this regard, the offering memorandum
stated, in part, as follows:
The principal tax benefits expected from an
investment in the Partnership are to be derived from the
Limited Partner’s share of investment and energy tax
credits and tax deductions expected to be generated by the
Partnership in 1982. The tax benefits on a per Unit basis
are as follows:
Projected
Regular Investment Projected Tax
Payment and Energy Tax Credits Deductions
1982 $50,000 $77,000 $38,940
The Limited Partners are not liable for any additional
payment beyond their cash investment for their Units, nor
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Last modified: May 25, 2011