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dealership's income (or increase in the dealership's
loss).
* * * * * * *
Mr. Howard projected that the effect of competition by
David Markley would be reduction in sales of at least
twenty-five percent (25 percent). A twenty-five
percent (25 percent) reduction in sales would equate to
a loss of $1,497,000 over the term of the covenant
[$1,996,000 x .25 x 3].
Petitioner cites the testimony of Stuart Ray,3 who was
allowed to testify under Rule 143(f)(2) as an expert on the
automobile dealership industry's practice of using covenants not
to compete:
Mr. Ray indicated that based upon his experience,
practice and industry custom he would estimate lost
profit [lost sales] due to competition from a seller
[not petitioner specifically] in an Oklahoma City
metropolitan dealership such as this one, in the range
of twenty percent (20 percent) to twenty-five percent
(25 percent).
b. Respondent's Arguments
Respondent, while admitting that the covenant has some value
($125,000), argues that petitioner has overstated the magnitude
of potential lost sales from Mr. Markley competing with
petitioner, citing petitioner's strong background in auto sales
and established presence in the Oklahoma City market.
3 Mr. Ray is a C.P.A. and was a partner in an accounting
and consulting firm whose clientele consisted of about 400
automobile dealers in 30 States. Mr. Ray has negotiated over 40
buy-sell agreements; prepared tax returns and financial
statements for at least 60 automobile dealerships; and has 17
years of experience working exclusively with automobile
dealerships. Mr. Ray, however, had no personal knowledge of
petitioner's transactions and did not opine on the value of the
seller's covenant not to compete.
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