- 6 -
be as marketable as virgin pellets; and (6) certain potential
conflicts of interest existed.
The disclosure of potential conflicts of interest in the
offering memorandum made clear that the parties involved in the
partnership transactions had ongoing business relationships and
that many of the individuals involved had interests in more than
one entity involved in the transactions. The memorandum revealed
that: (1) Richard Roberts (Roberts), the general partner of Foam
was a 9-percent shareholder of F&G; (2) the executive vice
president of PI was a 9.1-percent shareholder of F&G; (3) Elliot
Miller (Miller), general counsel for PI, was a 9.1-percent
shareholder of F&G; and (4) Miller was the attorney for Samuel
Burstein, one of the F&G evaluators, and Miller also represented
Roberts in connection with certain tax and other matters, F&G in
corporate matters, and other individuals involved in the
transactions in a variety of matters.
The absence of independent representation was also stressed
in the offering memorandum:
Prospective purchasers have not been independently
represented in connection with the structuring or
conduct of the Offering. Each prospective purchaser is
urged to seek independent advice and counsel before
making an investment in the Partnership.
The offering memorandum prominently touted the anticipated
tax benefits for a limited partner in the initial year of
investment:
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Last modified: May 25, 2011