Freres Lumber Co., Inc. - Page 20

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            reasonably intended to keep D.C. Walker from competing with                                    
            petitioner.  D.C. Walker intended to and did continue to live                                  
            and work in North Santiam Canyon.  D.C. Walker had financial                                   
            resources available to compete with petitioner.  Petitioner                                    
            paid the Walker family a $1 million downpayment with petitioner                                
            owing them the balance.  The Walkers kept some high-cost timber                                
            contracts that petitioner believed were money losers.  After the                               
            sale, the Walker entities owed more to the Government for                                      
            timber contracts than the purchase price for the Walker assets.                                
            However, the Walkers owned the timber in those contracts.                                      
            Respondent conceded that D.C. Walker's age and health did not                                  
            impede him from competing.1  He unsuccessfully bid on timber in                                
            Washington State and tried to buy a mill near Olympia,                                         
            Washington.  These facts favor petitioner.                                                     
                  Respondent points to the fact that D.C. Walker told Mary                                 
            Walker that he was getting older and might want to do something                                
            different.  He testified that at the time of the Walker asset                                  
            sale he had no thoughts about what he would do after the sale.                                 
            He said that he would not retire, and he did not.  At the time                                 
            of trial, he had a partnership with Bebout which operated a                                    
            construction business and a sand and gravel pit.  We conclude                                  

                  1 Respondent conceded that D.C. Walker was in good health                                
            in 1988 even though he had had lung cancer surgery several years                               
            before the Walker asset sale.                                                                  

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