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eliminated if the partnership could not demonstrate that the
price paid for the recyclers approximated their fair market
value. The opinion did not purport to rely on any independent
confirmation of the fair market value of the recyclers. Rather,
the opinion clearly relied on Stanley Ulanoff’s (Ulanoff)
conclusion that the purchase price to be paid by F&G was fair and
reasonable. The opinion also relied on the representations of PI
and other entities involved in the transactions that “the prices
paid by ECI and by F&G and the terms of the Lease were negotiated
at arm’s length” to reach the conclusion that “the basis to the
Partnership upon which the aggregate investment and energy tax
credits are to be computed is the price paid by F&G for the
Sentinel Recyclers”.
Also included in the offering memorandum were the reports of
two “F&G Evaluators”, Samuel Z. Burstein (Burstein) and Ulanoff.
Burstein was a professor of mathematics at New York University.
Burstein’s report concluded that the recyclers were capable of
continuous recycling. The report also concluded that the
recycling system would yield a material having commercial value.
At the time Ulanoff prepared his report, he was a professor
of marketing at Baruch College and also the author of numerous
books on technical and marketing subjects. Ulanoff’s report
concluded that the price paid by F&G for the recyclers, the rent
paid by Foam, and the joint venture profits were all fair and
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Last modified: May 25, 2011