Bemidji Distributing Co., Inc. - Page 20




                                       - 20 -                                         
          distributorship, although he has valued three covenants not to              
          compete in other businesses over the past 5 years.  He did not              
          interview Mr. Langdon nor anyone associated with the business.              
               Mr. Chouravong opined that the fair market value of the                
          covenant was $121,000, based upon a number of assumptions of                
          dubious validity.  He assumed, for instance, a growth in the                
          business of 2.7 percent per year, "based on the average growth              
          rate from 1988 through 1991".  We cannot verify this figure since           
          he does not identify the source of this information and no                  
          documents demonstrating this were attached to the report or are             
          otherwise in the record.  We do know, however, that for the 2               
          most recent (and relevant) fiscal years, those ending February              
          28, 1991, and February 29, 1992, the rate of growth was 9.19                
          percent (from $197,923 to $215,236).                                        
               Mr. Chouvarong then piled discounts upon discounts.                    
          Beginning with a potential net income of $217,700, he seems to              
          have assumed a potential 50 percent loss of business if Mr.                 
          Langdon were to compete.  He then halved this on the ground that            
          Mr. Langdon would need 6 months of startup time, an assumption              
          that would not apply under either of the most likely scenarios,             
          buying an existing distributorship or going to work for one.                
               Further, Mr. Chouravong assumed only a 45 percent likelihood           
          that Mr. Langdon would actually compete in the first year (with             
          decreasing percentages in subsequent years).  On the other hand,            






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