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Petitioners ask the Court to ignore the plain meaning of the
language chosen by the parties to the purchase agreement and the
employment agreement. Petitioners argue that, in form, part of
the sale price of Washington Chocolate was allocated among a
noncompete payment and commissions; however, they argue that the
substance of the deal was that all payments received by
petitioner were for the assets of Washington Chocolate.
Therefore, petitioners claim the asset sale price should be read
as follows: $600,000 in cash, $500,000 for a noncompete payment,
and $900,000 for commissions payable for 7 years, for a total
sale price of $2 million.
Petitioners argued at trial and on brief that although the
purchase price was allocated as outlined above, the intent of the
parties was an asset sale. At trial, Lynch, the former president
of Harmony Foods, testified that the sale of Washington Chocolate
to Harmony Foods was understood to be an asset sale. Lynch was
interested primarily in one asset, which was Washington
Chocolate's customer list.
If this transaction was merely as asset sale, as petitioners
claim, we fail to see why the payments were structured as
outlined above. The logical explanation is that the payments
were not just for the assets of Washington Chocolate. Both
petitioner and Lynch testified that the industry in which they
were involved was extremely competitive, and the two had
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