John T. Jorgl and Sharon Illi - Page 18




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          Inc. and Little Rascals Child Care Centers, Inc.”  It provides              
          that “John Jorgl and Sharon Illi will not compete with Little               
          Rascals”.                                                                   
               The allocation of purchase price at issue here was made in a           
          second pair of documents.  The BUYER’S CLOSING STATEMENT, signed            
          by Mr. Shah, and the SELLER’S CLOSING STATEMENT, signed by the              
          trustee, each state:  “Purchase price of Covenant Not to Compete            
          (pay to Seller):  300,000.00".  The separate covenant document              
          signed by petitioners makes no reference to price or payment.               
          The purchase agreement provides that $650,000 is the “purchase              
          price of the stock and any covenant not to compete”.                        
            Applicability of the Danielson Rule or the Strong Proof Rule              
               Given this scenario, the first question that must be                   
          addressed is whether either the Danielson rule or the strong                
          proof rule applies.  We note as a threshold matter that appeal              
          would normally lie to the Court of Appeals for the Eleventh                 
          Circuit, where decisions handed down by the Court of Appeals for            
          the Fifth Circuit prior to October 1, 1981, are precedential.               
          See Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.              
          1981).  Since the Court of Appeals for the Fifth Circuit adopted            
          the Danielson rule in Spector v. Commissioner, 641 F.2d 376, 384,           
          386 (5th Cir. 1981), revg. 71 T.C. 1017 (1979), we shall examine            










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