Charles B. and Teresa A. Thompson, et al. - Page 16

                                       - 16 -                                         
          the covenant or upon the death of the grantor; and (k) the                  
          existence of active negotiations over the terms and value of the            
          covenant not to compete.  Molasky v. Commissioner, 897 F.2d 334,            
          337 (8th Cir. 1990) affg. in part and revg. in part T.C. Memo.              
          1988-173; Warsaw Photographic Associates, Inc. v. Commissioner,             
          84 T.C. 21 (1985); Furman v. United States, 602 F. Supp. 444                
          (D.S.C. 1984) affd. without published opinion 767 F.2d 911 (4th             
          Cir. 1985); see Beaver Bolt, Inc. v. Commissioner, T.C. Memo.               
          1995-549 and cases cited therein. a.  Grantor's Business                    
               Respondent concedes that Holliday and Beaurline had                    
          considerable experience in the beauty supply business.  The                 
          record is replete with evidence that Holliday and Beaurline had             
          the business experience necessary to compete effectively.                   
               b.  Grantor's Intent to Compete                                        
               Beaurline and Holliday discussed whether they should agree             
          to covenants not to compete.  They decided that noncompete                  
          agreements would be acceptable only if the "price was right" for            
          removing themselves from the beauty supply business for 5 years.            
          Beaurline credibly testified that he probably would have gone               
          back into the beauty supply business after the sale of State                
               c.  Grantor's Economic Resources to Compete                            
               Holliday received approximately $1,850,000 and Beaurline               
          approximately $1,240,000 from their sale of stock in State                  

Page:  Previous  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  Next

Last modified: May 25, 2011