Freres Lumber Co., Inc. - Page 26

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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                                     
                         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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