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high price contracts of the late 1970's and the early 1980's
before timber prices fell.
E. Petitioner's Purchase of the Walker Entities' Assets
1. Events Leading to the Sale of the Walker Entities'
Assets
In 1987, D.C. Walker told Mary Walker that he was getting
older and might like to do something else. At that time, he had
no plans for his future, but he was not ready to retire. In
1987, the Freres family and D.C. Walker discussed a sale of the
Walker entities, but did not agree.
In February 1988, D.C. Walker believed that a shortage of
logs would cause trouble in the forest products industry in the
future. He believed the industry was beginning to decline and
that it would be a good time to sell the Walker entities.
Petitioner wanted to buy the Walker entities at that time.
Petitioner wanted to obtain a noncompetition agreement for D.C.
Walker from the first time it expressed an interest in buying the
Walker entities. D.C. Walker handled the sale for the Walker
entities. He had a price of $4.65 million in mind. Petitioner
agreed to that price without negotiations. D.C. Walker did not
care how the purchase price was allocated to the various assets
and did not negotiate those allocations with petitioner.
2. Petitioner's Valuation of Assets
Without involvement by D.C. Walker, petitioner allocated the
purchase price to the various assets. Robert T. Freres, Robert
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