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cirrhosis of the liver 13 months after executing the covenant not
to compete, respondent concluded that Brigitte was in a state of
poor and declining health at the time the covenant not to compete
was executed. Furthermore, given the nature of Brigitte's
illness, respondent also assumed that Brigitte's ailing health
was known by both parties at the time the covenant was executed.
See Commissioner v. Killian, 314 F.2d 852 (5th Cir. 1963), affg.
T.C. Memo. 1961-83; Krug v. Commissioner, T.C. Memo. 1981-522.
Three other events further caused respondent concern with
regard to the valuation of the covenant not to compete. First,
respondent explains that, because the execution of the covenant
not to compete followed rather than preceded Brigitte's
termination from Brinson, Brinson may not have perceived Brigitte
as a legitimate competitive threat. Such a perception by
Brinson, respondent contends, lends support to her position that
the covenant not to compete was overvalued. Second, respondent
explains that Brigitte sought and received a dismissal of her
alimony claim against Gunther immediately following the execution
of the covenant not to compete. Respondent's concern here was
that the covenant not to compete may have contained an alimony
component. See Balthrope v. Commissioner, supra. Third,
respondent explains that the covenant not to compete was not
designed to terminate upon the death of Brigitte; rather, its
terms required continued payments payable to her estate.
Respondent maintains that this fact lends further support to her
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