- 29 -
7. Conclusion About the Value of the Covenants Not
To Compete
We conclude that D.C. Walker's covenant not to compete had a
fair market value of $900,000 on March 1, 1988. Because Mary
Walker had less experience in the timber industry and no stated
intent to compete and posed no credible threat to petitioners, we
conclude that the fair market value of her covenant not to
compete was zero on March 1, 1988. While Bebout lacked
experience in certain aspects of the timber industry, we think
her knowledge, the fact that her brother competed effectively,
and her subsequent work history show that her covenant had some
value, which we conclude was $30,000.
B. Fair Market Value of Land
Petitioner reported that the fair market value of the land
belonging to the Walker entities was $130,000 on March 1, 1988.
Respondent determined that the fair market value was $200,000.
The land consisted of the mill site and ancillary land. The
mill site was the 35-acre area surrounding the mills. The rest
of the land (about 93.5 acres) was ancillary land. Darr Goss
(Goss), petitioner's expert real property appraiser, concluded
that the land was worth $145,000 based on six sales of land
comparable to the mill site and five sales of land comparable to
the ancillary land. Respondent did not cross-examine Goss or
offer any evidence about the fair market value of the land.
Page: Previous 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 NextLast modified: May 25, 2011