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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.
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