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(6) there was no established market for the sale, leasing, or
licensing of Sentinel EPS Recyclers; and (7) certain potential
conflicts of interest existed.
The memorandum projected that in the initial year of
investment an investor contributing $50,000 for one unit would
receive total investment tax credits and business energy credits
of $81,529 plus tax deductions of $38,768.6 The memorandum
stated that an investor in SAB Foam was required to have an
individual net worth and/or net worth with a spouse of $1
million, inclusive of residences and personal property, or income
of $200,000 per year for each unit of investment.
The memorandum included a marketing report by Stanley
Ulanoff (Ulanoff), a marketing consultant and professor, and a
technical opinion by Samuel Z. Burstein (Burstein), a mathematics
professor. The memorandum warned investors not to rely on the
statements and opinions contained in the memorandum but to
conduct an independent investigation.
The memorandum included a Form of Opinion of Counsel (tax
opinion) prepared by Boylan & Evans, a New York law firm. The
tax opinion, addressed only to the general partner, included in
the first paragraph the following disclaimer:
6 Regardless of the memorandum, the parties have stipulated
that the projected tax deductions would be $39,988 for each
$50,000 unit of investment.
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Last modified: May 25, 2011