7
Phillip J. Rigney (Mr. Rigney) signed the agreement on
behalf of Safeguard. According to Mr. Rigney, Safeguard was
acting as an agent on behalf of the former distributors in the
sale of their rights to their customer bases. For over 10 years,
Mr. Rigney's position with Safeguard was that of sales manager,
which involved direct responsibility for and support of a group
of sales distributors. Mr. Rigney found in his experience that
the purchase price of a customer list generally is the product of
the sales generated from the customer base over the previous 12
months multiplied by a factor ranging from 1 to 2. Mr. Rigney's
recollection was that there were several negative factors
associated with the lists as to which petitioner acquired the
commission rights, including the poor economy in Texas in 1988
and the lack of consistent servicing of the customers on the
lists. A factor of 1 was used in determining the price charged
to petitioner. In Mr. Rigney's opinion, petitioner was a strong
negotiator, and he believed that this is why the Agreement was
not finalized until December 1988.
Petitioner received commission statements on or about the
fifteenth of each month for the prior month's sales. Petitioner
operated her business on the cash basis. Safeguard withheld
territory repayments of $18,238.42 in 1988 from petitioner's
monthly commission statement. The amounts withheld in 1988 were
not fixed monthly sums but varied. Petitioner's monthly
commission statements for 1989 reflect a total amount of
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