Freres Lumber Co., Inc. - Page 28

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            conceded that his method could not account for this situation                                  
            because he only analyzed available timber volume and not the                                   
            prices of timber.  The Walkers competed with the three mills that                              
            petitioner owned.  Hungate ignored this fact and only measured                                 
            the cash-flow of the two mills that petitioner bought from the                                 
            Walkers.  Hungate testified that petitioner and the Walkers                                    
            bought timber from the Forest Service, BLM, and the State of                                   
            Oregon.  Hungate ignored timber sales from BLM and the State of                                
                  Hungate evaluated the volume or market share of timber.  To                              
            select a dollar value, he assumed that the available volume of                                 
            timber had a direct relationship with cash-flow.  He assumed that                              
            each percentage increase of available volume of timber resulted                                
            in about the same percentage increase in cash-flow.  He did not                                
            support that assumption.  Hungate testified that the Court should                              
            use caution in relying on his method.  He admitted that it is                                  
            very difficult to analyze the direct relationship between the                                  
            volume of timber and cash-flow because many factors affect cash-                               
            flow.  However, he did not explain those factors.  We also                                     
            disagree with Hungate's conclusion that Bebout's covenant not to                               
            compete had no value.  We do not find Hungate's estimates of the                               
            value of the covenants not to compete to be very convincing.                                   

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