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owners and managers of the supermarkets, which formed the basis
of his ability to direct the wholesale distribution of super-
premium ice cream to the supermarkets; the second, and much less
valuable, was the business records that had been created by
petitioner during Arnold’s development of the supermarket
business, and transferred by petitioner to SIC.
Arnold built the business of wholesale distribution of
super-premium ice cream to supermarkets on the twin foundations
of his personal relationships with the supermarket owners, the
development of which preceded the creation of petitioner by
some years, and his personal, handshake understanding with
Mr. Mattus, which continued with H�agen-Dazs after its sale to
Pillsbury. In developing his supermarket distribution business,
Arnold changed the way ice cream was marketed to customers in
supermarkets. The success of the venture depended entirely upon
Arnold. Mr. Mattus’ offer to go into business with Arnold
distributing H�agen-Dazs ice cream products on the West Coast
attests to the value that Mr. Mattus, H�agen-Dazs, and later,
Pillsbury, placed on Arnold’s position in the market, which
retained considerable value as late as June 1988, when petitioner
distributed the SIC stock to Arnold in redemption of his stock in
petitioner.
Ownership of these intangible assets cannot be attributed to
petitioner because Arnold never entered into a covenant not to
compete with petitioner or any other agreement--not even an
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