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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. 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:
We have consented to your inclusion of the proposed
form of this letter in the Memorandum, but this letter
is intended for your own individual guidance and for
the purpose of assisting prospective purchasers and
their tax advisors in making their own analysis, and no
prospective purchaser is entitled to rely upon this
letter.
The tax opinion expressly warned that the investment and energy
tax credits available to limited partners would be reduced or
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Last modified: May 25, 2011