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and manufacturing facilities would not have had to incur
tremendous startup costs or, even, allot significant economic
resources in order to compete effectively with petitioner.
New Lorvic, however, did not have long-term contracts with
either the business suppliers or distributors subsequent to the
1989 transaction. In that vein, we note that the customer base
was not bound, contractually or otherwise, to Old Lorvic's
products. Consequently, the distributors and ultimate customers
were not precluded from testing the effectiveness of other
products. On the other hand, in Richard Nemanick's estimation,
Old Lorvic did not have a single competitor that designed,
manufactured or distributed a wide range of similar or identical
items.
The parties evidently agree that most of petitioner's
products were relatively simple to manufacture. Hence, a
potential competitor would find it elementary to replicate the
majority, if not all, of the products. Thus, competition from
Scherer or any disclosure to outside individuals or entities of
the proprietary information from petitioner would have had
significant impact on petitioner's bottom line. For example, Old
Lorvic's top 10 customers constituted more than 50 percent of its
revenues. Therefore, we believe that any competition by Scherer
would substantially harm petitioner's profit margins.
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