Legal Negotiation Plan – Winona Bonsai

Introduction – Rapport Building

Thank you for taking the time to meet with us.

Introduction of our side.

Agenda Setting

First some preliminary inquiries

Followed by discussion of primary interests for both sides
Step by step walkthrough of the assets and debts
Negotiating trade offs
Coming to an overall agreement

Preliminary Inquiries
Are any of the assets of high importance to Hartly? Are there any assets Hartly is not interested in?

Are there any assets or debts that Hartly is aware of other than those provided in the facts?
We are aware that Hartly was recently seen driving a Mercedes. How was it purchased?
Hartly is currently living in a condo, is he living there alone? How is it paid for? Furnishing? Utilities?

Most of the money put on the cards wasn’t by us? Our client used the cards for clothes and other cheap
things, is there any recent purchases that we should be aware of?

We are aware that Hartly’s employee Lisa recently received a large raise, why did she receive it? Does he
believe that it is appropriate given the situation?

Schedule of Assets and Debts

Assets - Joint
Home – 1,000,000 to 1,350,000 (mortgage of $950,000 remains)
Cottage in Flacon Lake – 425,000 (purchased for $285,000)
2012 FLT Electra Glide Harley Davidson – 15,000
2010 24 Pontoon Boat – 6,000 (at the lake)
2009 Seadoo with boat covers and trailers x2 – 24,000 each x2
Misc Water Toys(trampoline, tubes, pedal boat, canoe, windsurfer, kayak) – 7,000
Kawai Baby Grand Piano – 5,000
Furniture – 50,000 (estimated FMV)
Artwork – 24,000
Art Supplies – 4,000
Plasma 80 HD TV – 6,500 paid in 2012
Three Dell PC – 9,000 paid 2011
Surround sound system – 8,000
Joint Bank Account – 2,000

Assets – Winona
MDX 2012 – 50,000
2012 Toyota Solara Convertible – 24,000
HWB 100 Class B Non-Voting Shares Common Shares – Half Value of company

Assets - Hartly
2009 Larson Ski Boat – 23,000
HWB 100,000 preference shares – 100,000
HWB 100 Class A Voting Common Shares – Half Value of Company
Whole Life Insurance Policy of Hartly Life – 25,000 Cash value if cancelled, beneficiary is Winona

Debts
Mortgage of 950,000 – 6,220.05 in BOTH
Visa Hartly – 32,500 in HARTLY
Amount owing at Holt Renfrew – 1500 in WINONA
Mastercard – 11,000 in BOTH

General Plan
Top Priorities
Keeping the cottage
Getting her share of the value of HWB
Ensuring Children are not affected by the divorce – Schooling, neighbourhood, child support and
extracurriculars

Moderate Priorities
New York Trip
Spousal support IF HWB ownership is traded off
Life Insurance Policy – Wants it to continue until children are independent

Concessions/Trade offs
Willing to sell family home
Give up the Solara in exchange for keeping the MDX and the Harley
Plasma TV and stereo system (wants New York trip or another concession)

Itemized Interests
Issue #1 – HWB

This is likely Hartly’s biggest concern as Winona currently in a strong position on this issue.

Current State of the company:

August 2012 there is 1 million in accumulated investments
Hartly Salary is 175,000
Winona is 42,000
Dividend paid to Winona – 40,000
HWB net income 800,000 per year for the last two years

Current issues with the company:

Lisa big raise – Need this stopped
What is the current value of the company?
Need access to the balance sheet of the company.
What are the major liabilities of the company? How much is in the retained earnings?

Recent developments and analysis:

100,000 offer for her shares. Seems very low considering the following:
2005 the company was valued at 100,000 to 400,000
BEST to keep money in the company for tax planning purposes, but this is mostly a benefit for Hartly
Accountant advised them at the time to retain 500,000 in HWB. There is currently $1,000,000 in assets
in the company already. The $500,000 need not be subtracted every year!
NET income last two years 800,000. From that there is currently 217,000 total for salaries and dividend
subtracted.

Winona’s Goals:
Wants the $42,000 to continue (willing to do some bookkeeping). Maybe take the value of the shares
and spread it out until the kids are independent.
Fairness
She has a right to half of the value of the company as she is a 50% owner of it. May need a valuation if
he is unfair.
May be willing to take a somewhat lower settlement if she gets access to other guarantees relating to
cottage, support, etc.

Alternatives if unreasonable:
She just wants what is fair, BUT she is willing to trigger oppressive remedy
Could also force a wind down of the company which would greatly harm both of them.

Potential Solution: Yearly payments for 10-13 years until kids are dependent, instead of one lump sum
buy out in exchange for giving up shares.

Issue #2 – Family Cottage

285,000 purchase price, now roughly valued at 425,000
Winona and her kids spend mid June to August there
Value of cottage has skyrocketed

Does he want to be at the cottage?

Does he want us to keep the boat and sea doos?
WINONA NEEDS ENOUGH SUPPORT TO BE ABLE TO AFFORD THE COTTAGE
WILL MAKE CONCESSIONS on some assets if necessary
SHE IS OK WITH UP TO TWO WEEKS of Hartly (end of July to mid August)
DOES NOT BELIEVE HE WILL WANT TO TAKE LAKE FROM CHILDREN

Potential solution: Winona needs title, but willing to negotiate access in the summer if he wants it.

Issue #3 – Children – Support, School, Extracurriculars, Custody

School
42,000 – Tuition, busing, daily lunch
Additional costs of 1,800
Uniforms – 800
Works out to 44,600 a year currently (Costs will increase as kids get older)

Winona Goal
Commitment that the kids continue in the school and Hartly supports them in pursuing university
degrees.

Extracurriculars
EXTRACURRICURIAL COSTS 4200 a year

Kids
Peeta – Grade 4 – Dance. Needs help driving
-Soccer Monday
-Basketball Tuesday
-Piano Lessons Wednesday after school
-Peeta has dance on Thursdays – Wants maybe more classes up to 3 in a week (6-8000 a year)
Charlie – Grade 1
-Soccer Monday
-Basketball Tuesday
-Piano Lessons Wednesday after school
Jools – Kindergarten
-Soccer Monday
-Basketball Tuesday
-Piano Lessons Wednesday after school

Details and Issues

Kids at school 8-4:15 each day

Goal – Hartly continues to pay for the activities and agrees to potentially increasing if Peeta take more
dance classes. Potential to split costs if they rise.
Custody
Currently :
Grandma taking care of kids when Winona is unable to (6-10 Wednesday night is when she has been
staying)
Betta dislikes Hartly – It’s a negative
Winona doesn’t want the kids to meet Lisa
Currently sees the children on alternate Saturdays from noon to 4 pm
Speaks to them daily on the phone
Contested days: Christmas and Children Birthdays

Goals:
Winona is ok with overnight weeknight visits, but FIRST needs weeknight visits (Monday or Friday are
only days that really work due to activities. Maybe Wednesday instead of Betta)
Starting Point – Primary Caregiver
Willing to slowly move towards Joint Custody – Weeknight visits -> Overnight visits (Wednesday nights)
MUST KEEP FINAL DECISION MAKING ON HEALTH AND EDUCATION
She wants Mothers Day, and a solution for other contested holidays
NEED HELP DRIVING -> Trade off driving with additional time/visits with kid

Child Support
Child support currently 2,800 a month
This needs to continue.

Issue #4 - Spousal Support

Winona Personal life
-used to be a receptionist at a music school
-now only working about an hour a week doing the books
-Winona recently made 1200 at an art show, but unlikely that this amounts to anything stable
-cant make a living selling art currently
-does not want to disclose job offers

Current Employment options:

Winnipeg Art Gallery offer of 32,000 a year has lots of flexibility. She could stay home on days off or
when they are sick. Three weeks vacation in summer MAX.
Job offer in Steinbach. Received offer on November 9 2013 and would start on January 30, 2014. The
salary would be 52,000.

Winona Goals
Don’t disclose employment options.
Either maintain position in HWB with the same level of payment, or receive a large enough buy out to
make up for lost income.
Issue #5 - The Family Home
-Utilities are 2004/month
-Taxes are 8000/year
-Mortgage is 75,000/year
-its too big
-real estate agent said 1,000,000 would be good list price

Winona Goals:
Will not move out of the neighbourhood
Wants a reasonable house with 4 bedrooms and room for her art supplies (House valued at 400,000-
500,000)
Wants a possession date after school year done, or a house secured before she lists.

Issue #6 - Other Assets

Motorcycle – Shes using it, its in her name, but was a gift for him. Unclear if he wants it(he was a bad
rider). – She wants to sell it next year in order to buy a more practical vehicle (15,000)

Mercedes – New vehicle, unknown value and owner (may have been purchased for Lisa).

Solara – Winona will give up the Solara if she can keep the MDX and HARLEY. IF they cannot agree to this
trade it should be sold (24,000).

MDX – Good for driving the kids, and an all season vehicle (50,000)

She wants to trade the Solera in exchange for the MDX and the Harley. If not she will sell the Solara and
Harley and divide the revenue.

Plasma TV and Stereo system

-She does not want to keep (6500 and 8000)
-but wants New York trip in exchange for this, OR some other concession

Artwork and furnishings

-she wants to keep all of the artwork (24,000).
-she is very involved and interested in art. She will be living In a house. She picked it out.

Joint Credit Cards

-Hartly has been paying off the credit card (32,500) and Mastercard (11000)
-ISSUES: Why is she paying for childrens clothes off of it? Hopefully Hartly will settle these amounts.