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retirement. Mr. Meinke handled the sale of the partnership
interests.
Ms. Robnett did not investigate Mr. Meinke’s experience, or
lack thereof, in agricultural investments and/or research and
development. Neither did she investigate the partnership’s
investment prospects--apart from the uses of jojoba--before
petitioners made the investment. She did not conduct cash-flow
analyses or evaluate potential jojoba markets. She did not
independently research other commercial jojoba plantations. She
never traveled to the plantation to investigate the progress
which had been made.
According to the private placement memorandum distributed by
the promoters of Yuma Mesa, the partnership was organized “to
engage in research and development and, thereafter, participate
in the marketing of the products of the jojoba plant.” Interests
in the partnership were offered for $12,245 each, payable by cash
of $3,571 and a 4-year promissory note of $8,674 bearing 10
percent annual interest.
Yuma Mesa was organized as a limited partnership with two
cogeneral partners. The general partners, G. Dennis Sullivan and
William Woodburn, were lawyers; the private placement memorandum
listed no experience of either outside the legal field. Yuma
Mesa was to enter into a “Research and Development Agreement”
with Hilltop Plantations, Inc. (Hilltop), which would in turn
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