Thomas N. Carmena - Page 11




                                       - 11 -                                         

          prudent person would have exercised under like circumstances.               
          For the reasons set forth below, the Court disagrees with                   
          petitioner's contentions.                                                   
               First, the principal flaw in the structure of Utah I was               
          evident from the face of the very documents included in the                 
          offering.  A reading of the R & D agreement and licensing                   
          agreement, both of which were included as part of the offering,             
          plainly shows that the licensing agreement canceled or rendered             
          ineffective the R & D agreement because of the concurrent                   
          execution of the two documents.  Thus, the partnership was never            
          engaged, either directly or indirectly, in the conduct of any               
          research or experimentation.  Rather, the partnership was merely            
          a passive investor seeking royalty returns pursuant to the                  
          licensing agreement.  Any experienced attorney capable of reading           
          and understanding the subject documents should have understood              
          the legal ramifications of the licensing agreement canceling out            
          the R & D agreement.  However, petitioner never consulted an                
          attorney in connection with this investment, nor did he carefully           
          read the offering himself.7                                                 


               7    Petitioner testified that he retained the services of             
          an attorney named Bob Clark (Mr. Clark) to prepare wills and                
          various contracts, incorporate his medical practice, and form the           
          Neal Carmena Family Trust.  Petitioner, however, failed to seek             
          Mr. Clark's advice with respect to a potential investment in Utah           
          I.                                                                          






Page:  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