Ernest I. Korchak - Page 16

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          generally, the basis for the polystyrene forecasts contained in             
          the POM, the history of the equipment, and whether and how the              
          equipment was running.  Petitioner never spoke with an expert in            
          plastic recycling either before or after he made his investment,            
          however, because he felt he had a better understanding than most            
          regarding the technology of styrene, polystyrene, and recycling.            
               In performing his research, petitioner considered that                 
          Madison had no operating history, and he was aware that the POM             
          stated that “[PI] has no experience in the manufacturing and                
          operation of the Sentinel EPS Recyclers, nor does RRI or PI have            
          any experience in using or selling the resin pellets resulting              
          from the second stage of recycling.”  Mr. Roberts informed                  
          petitioner, however, that, contrary to the statements in the POM,           
          PI had been running the recyclers for some time.                            
               Petitioner did not seek independent legal advice regarding             
          Madison between November 24, 1982, the date he received the POM,            
          and November 30, 1982, the date he invested in Madison.                     
          Petitioner did request, however, a copy of the limited partner              
          opinion referenced in the HG&C cover letter accompanying the POM.           
          Petitioner received the limited partner opinion sometime after              
          December 21, 1982, the date Mr. Roberts countersigned the                   
          agreement, and after petitioner had tendered his money for the              
          investment.  The limited partner opinion was nearly identical to            
          the general partner opinion.  The only differences were that the            






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