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5. Expert Testimony
The parties each called expert witnesses to give their
opinions about the value of the covenant not to compete.
Expert witnesses' opinions can aid the Court in
understanding an area requiring specialized training, knowledge,
or judgment. However, as the trier of fact, the Court is not
bound by the experts' opinions. Helvering v. National Grocery
Co., 304 U.S. 282, 295 (1938). The opinions of expert witnesses
are weighed according to their qualifications and other relevant
evidence. Anderson v. Commissioner, 250 F.2d 242, 249 (5th Cir.
1957), affg. in part, remanding in part T.C. Memo. 1956-178;
Johnson v. Commissioner, 85 T.C. 469, 477 (1985).
a. Respondent's Expert
Respondent's expert, William E. Holmer (Holmer), concluded
that the value of the covenant not to compete was $52,669.
Holmer viewed the 25-percent penalty provision for breach of the
covenant as evidence of what petitioner would pay Grecco for not
competing. He used $421,346 as the starting value of Grecco's
stock in petitioner (as established by the stock purchase
agreement), 25 percent of which is $105,337. He weighed the
conflicting positions of petitioner (which was a party to
the stock redemption agreement; that agreement provided for 25
percent of the total purchase price as a penalty for breach of
the covenant) and Grecco (who did not negotiate for payment for
not competing versus payment for the stock), and concluded that
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