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replace the Walkers in bidding for timber. Clausen testified
that whether a bidder drops out depends on each bidder's backlog
of stumpage, market for their product, need for the timber, and
many other variables.
Clausen believed that there were few bids between petitioner
and the Walkers in the 3 years immediately before the Walker
asset sale because the Walkers had a large volume of timber
contracts remaining from the early 1980's. The Walkers kept
timber contracts after the Walker asset sale. Petitioner made
clear that one of the reasons for the covenants not to compete
was to eliminate the Walkers from bidding for timber. However,
Clausen did not explain why the timber contracts that the Walkers
kept and the continued decreased bidding activity would not
affect the value of the covenants not to compete.
There is no doubt that D.C. Walker affected petitioner's
cost for timber; however, we believe Clausen's analysis
significantly overstates the value of the covenants not to
compete.
b. Respondent's Expert
Respondent's expert witness was D. Alan Hungate (Hungate)
of the First Princeton Corp. in Portland, Oregon. He concluded
that Mary Walker's and Bebout's covenants not to compete had no
value and that D.C. Walker's covenant was worth $403,000 on
March 1, 1988.
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