The opinion of the court was delivered by: MOTLEY
Plaintiffs, United Resources Equity Partners I, L.P., LIRO Group, L.P., and United Resources Energy Partners Series II, L.P., allege that they were defrauded in their purchase of National Energetics Company stock under § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) and S.E.C. Rule 10B-5 promulgated thereunder, § 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78t, § 12(2) of the Securities Act of 1933, 15 U.S.C. § 77 1(2), § 15 of the Securities Act of 1933, 15 U.S.C. § 77v, the Massachusetts Securities Act, Mass. Gen. Laws Ann. Chap. 110A, the Texas Securities Act, Tex. Rev. Civ. Stat. Ann. Articles 579 et seq., Section 27.01 of the Texas Bus. & Com. Code Ann. (West 1987), and common law.
A bench trial was held before the court on November 21, 22, 25 and 26, 1996. Based on the stipulations of facts between the parties, the trial testimony, and the exhibits, the court makes the following Findings of Facts and Conclusions of Law in favor of defendants.
1. Plaintiffs, United Resources Equity Partners, I, L.P., LIRO Group, L.P., and United Resources Energy Partners Series II, L.P., are all limited partnerships organized under the laws of the State of Delaware. Plaintiffs' managing general partner is United Resources Capital Management, Inc. (URCM), a corporation organized under the laws of the State of Delaware. Dennis M. Quirk is president and chief executive officer of URCM. Mr. Quirk formed the plaintiff partnerships for the purpose of investing in certain companies. (Tr. at 21-22).
2. Defendant, National Energetics Company (NECO), is a corporation organized under the laws of the State of Delaware. The remaining defendants, Randall T. Boyd, Bruce C. Boyd, Owen E. Boyd, Eugene P. Bergemann, John W. Sim, Frank P. Nagorney, and the Estate of E. Eugene Mahon, are all individuals who were associated with NECO at various times.
3. In 1987, 1988 and 1989, NECO was marketing a process called "trigeneration", which was developed by Randall T. Boyd. Trigeneration is a process which extracts carbon dioxide from the waste gases of a cogenerator. (Tr. at 316-317, 341-342).
4. In 1987 and 1988, NECO attempted to sell its trigeneration process to potential buyers, including Coca-Cola and Anheuiser Busch. (Tr. at 353).
5. In June, 1989, NECO entered into a lease regarding a cogeneration facility in Bellingham, Massachusetts where NECO was to install its trigeneration processes. (Exhibit 1). Under the terms of the lease, NECO was primarily responsible for maintaining and operating the facility. The lease also gave NECO permission to sell resulting carbon dioxide to any purchaser. (Exhibits 1, 9, 11). The lease also stipulated that NECO was to enter into agreements for the sale of carbon dioxide in a manner often referred to as "milestones": 50 tons must be sold by September, 1989, 100 tons by December, 1989, 150 tons by March, 1990, etc. (Tr. at 73-74). Under the terms of the lease, if the milestones were not met the lease could be terminated. (Exhibit 1).
6. During this time, NECO was extensively researching the carbon dioxide market in the northeastern United States. (Tr. at 371).
7. Based on its research, NECO decided that it could sell all the carbon dioxide it could produce at the facility in Bellingham, (Tr. at 406), and that a reasonable price for the carbon dioxide would be $ ...