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Richard Nemanick possessed extensive relationships with suppliers
and distributors, and that factor was a significant inducement to
the purchase of Old Lorvic's assets and to the retention of
Nemanick's services, as evidenced in the Distribution and
Acquisition Memoranda compiled by Shearson Lehman and Leck,
respectively.
In view of what we consider deficiencies and conflicts in
the reports and testimony of the experts for both parties, and
what we consider to be either oversights or deficiencies in the
documentation of the foregoing transactions, we believe and
decide that petitioner has not fulfilled its burden of
persuasion. For example, had petitioners provided stronger
enforcement provisions for its protection to assure compliance
with the agreements, such as injunctive relief or liquidated
damages for violations, the petitioner's position would be more
credible, especially in light of the substantial dollar amounts
appurtenant to the agreements being paid up front. Also, we find
it apparent that there was abundant going concern value which was
not adequately addressed by petitioner either in the testimony of
its management or in its experts' reports. For example, the
retention by petitioner of the seller's existing management is an
obvious reflection of the going concern value and petitioner's
objective to assure its continuance. However, we believe and
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