Salt Harbour part B analysis-Easterly

Note: the actual negotiated value should not be considered by either party as BATNA is supposed to be computed before g
used. For Easterly the financial outcome is cost incurred by buying the plot net of LRB trial if they win and Net off LRB trial+
information plus LRB costs if they win the court case and .LRB trial+Court trial costs if they lose the court case
Use following Inputs:
Expected period for Court litigations if eith
Roll No Name court.
Estimated % parcel price change after cou
2111201 Oshi Khurana purpose (if easterly wins)
Estimated % parcel price change after cou
2111204 Parikshit Mishra purpose (if Brim wins)
discount rate

Your estimate of chance of outcome

Very high
high
Medium high
Base Model
Medium
Low
VERY Low
Total Lawyer cost for representing at LRB

SR

Possible outcomes if we win: Chance(VH/H/MH/M/L/VL)

1 Brims sells the parcel to us (we outbid other residential bidders) M
We are frozen out and Brims sells the parcel for residential
2 purpose to another party MH
Expected Value of winning
Possible outcomes if we Lose
1 Brim Builds a coffee shop VH
2 Brims
We aresells the out
frozen parcel
andtoBrims
us (we outbid
sells other commercial
the parcel bidders)
for commercial VL
3 purpose to another party VL
Expected value of losing
Net Expected value of Court option after applying discount rate

Was out price

At what of court
yousettlement better for us?
would be indifferent Why? court case and
between Yes an out of court settlement would have
out of court settlement
With Hindsight how different our negotiation could have been?
What could be our BATNA?
 o be computed before going for negotiation (BATNA is independent of actual negotiations). Only information from your own confiden
win and Net off LRB trial+court costs if they lose. Hence these costs should be added. If Easterly fails to buy the cost will be maximum lo
court case
puts:
or Court litigations if either party goes to the Easterly
1 years
l price change after court case for residential
y wins) -10%
Win: Commercial use Not OK
l price change after court case for commercial
ins) W Pe =
10% 0.5
corresponding Easterly
chance of outcome probability
Very high 80-90%
high 70-80%
Medium high 50-70% L
Medium 30-50% Lose: Commercial use OK
Low 10-30%
VERY Low 0-10%
t for representing at LRB and court trials USD 25K (1-Pe) =
1 - 0.5 =
0.5

To find BATNA find RHS =

Financial implication
Probability for us Expected Value Explanation of financial implications
0.4 215000.0
We negotiated the
86000.0
price of the parcel for 215000$ and we wont have to pay the legal fees as wel

0.6 350000.0
According to 210000.0
the case facts, 350k is the total loss that we will see if the parcel is not sold to us
1.0 296000.0 According to the case facts, 350k is
the total loss that we will see if the
parcel is not sold to us. Additionally,
0.8 405000.0 324000.0 According
we will be to the case
paying facts,fees.
the legal 350k is
the total loss that we will see if the
0.1 270000.0
We negotiated27000.0
the price of the parcel
parcel for sold
is not 215000$
to us.andwe will also be paying 55000 as legal fees
Additionally,
0.1 405000.0 40500.0 we will be paying the legal fees.
1.0 391500.0

t settlement would have been better for us for 2 reasons. We woul

 nly information from your own confidential information should be
y fails to buy the cost will be maximum losses as per confidential

Easterly Frozen out

Business loss = 350k
q=
use Not OK 0.6
Easterly outbids other
Pe = Residential buyers
0.5
rly 100K
(1-q) = 1 - 0.6 = 0.4
Brim builds coffee shop

r1 = 0.4 Business loss + CC =

e: Commercial use OK
Brim sells to other 350k + 55k = 405k

(1-Pe) = r2 = 0.2
1 - 0.5 = Easterly outbids other
Commercial buyers
0.5 Some unknown “X” = 220k
(1-r1-r2) = 0.4
To find BATNA find RHS = A + c*(X+CC) where c is the coefficient, CC-court cost

e wont have to pay the legal fees as well

we will see if the parcel is not sold to us

we will also be paying 55000 as legal fees