11th ILS Intra College ‘The Negotiation Challenge’ 2022

Prelims Round Problem

‘Deep Pockets’

1. Daphne Kluger is one of the most well known and popular business women in the world
who has achieved great success at a very young age. Kluger, a child prodigy, started out as
an overambitious young girl, and at today’s date, is the CEO and founder of various popular
companies like KluCars, CosmoY, BillPay etc. along with being an angel investor.
According to the World Finance Organization, her current net worth is 112 billion Ducats
which is expected to increase by another 25% in 2022-2023, making her the 4th richest
person in the world. Her tech-savviness and the zeal to always invent future oriented
modern technology products, which are one of their kind, is a widely known talent of hers.
She has received global recognition for her work in the tech space, most notably for her
stand on development of technology being in sync with sustainable development.

2. Recently, she made global headlines when her automotive company, KluCars announced
its new car, the Model KluMobile, which is claimed to be the most environmentally
efficient and best performing SUV car ever built. It is powered by the most powerful
engine and also has an in-built self correcting AI technology - Jarvis . Within a day of its
launch, the KluMobile doubled the limit of its pre-booking, adding another feather of
success in Kluger’s cap.

3. Kluger, in addition to being a successful entrepreneur, is a popular social media figure with
millions of followers on multiple social media platforms who eagerly listen to her quips,
many of which are masked behind witty and quirky memes. Owing to her influential, tech-
 freak reputation, her opinions on a variety of topics like finance, politics, business and
environment significantly affect the opinion of people regarding these issues. Overtime,
her fanbase increased, which mostly appreciated her online quirkiness. This has made
Kluger an impulsive commentator on any and every issue out there. It is starting to affect
her reputation and parties dealing with her in any way have to be a little wary about her
next move. In January 2022, she made global headlines for walking out of a business deal
and provided no explanation for the same.

4. There were whispers that her steadfast and relentless attitude towards her work has started
to change and now, she is becoming stubborn and reclusive. This has driven her to take
sudden and rash decisions; negatively affecting her companies’ business expansion,
planned growth etc. For instance, in 2021, overnight, she launched a social media platform
named CONVERGE, which was bloated with features like video sharing and direct
downloading of the videos into the device, microblogging, voice note sharing, self-
destructing photos etc. It was an attempt by Kluger to have a social media platform which
had the combined features of all the existing social media platforms. Despite gaining
traction in the initial days the application failed miserably because of poor user interface,
slow performance coupled with hasty, impulsive launch, without taking into consideration
the suggestions of experts and lack of planned marketing strategy. The failure was globally
ridiculed in the form of memes and roast videos which left Kluger embarrassed,
discrediting her globally.

5. RantIt, a public limited company, is one of the oldest and first of its kind social media
platforms, which facilitates microblogging. It has gained popularity across the world and
is used by almost all the influential personalities like celebrities, politicians and
entrepreneurs including Daphne Kluger, who is widely followed and has a large active fan
following on the platform. Over the years, the platform has been used for dissemination of
knowledge and information, collaboration among like minded individuals, common people
voicing their concerns and connecting with those who are similarly affected. This has led
to a number of important movements like the MeToo movement, Black Lives Matter,
among other such important issues.
6. However, recently, the popularity of RantIt has dropped drastically and it has seen a major
decline in its popularity as it has failed to keep up with the changing needs of time and its
consumer base. Its users often complain that the platform lacks certain basic features like
allowing users to edit a rant, to upload more than 2 pictures together and buffering problems
while viewing high definition videos. It is also facing tough competition from multiple new
social media applications, like SnapTalk and InstaHit which have started introducing
features of micro-blogging along with several additional features, most of which are
visually appealing to its users. This has eroded the uniqueness of RantIt, resulting in a
dwindling number of users. In a popular poll, the users, most of whom are the younger
generation, preferred other social media platforms over RantIt.

7. Kluger, being an active Ranter herself, knew how redundant the platform was becoming,
but she still preferred to use it as it was the platform wherein she had the highest number
of followers. True to her nature, she decided to buy some stake in RantIt, determined to
regain its lost glory and put brakes on its downward trend. RantIt, being a public limited
company, had all its shareholding details in the public domain. The breakdown of the
shareholding is as follows:

Stakes with public Stakes held by angel Stakes held by other Total valuation of
(public investors (Part of private shareholders RantIt
shareholdings) private (part of private
shareholding) shareholding)

Worth 25 billion Worth 12.5 billion Worth 12.5 billion 50 billion Ducats
Ducats Ducats Ducats

50 % 25% 25% 100%

8. Kluger decided to act swiftly and offered to purchase around 23% of the stakes at a price
much higher than its current market valuation. Entire world along with the community of
 RantIT, along with its management got hooked to this news and waited with bated breaths
for RantIT’s reaction.

9. While Kluger was awaiting a reply, another piece of news started to make rounds. There
were widespread allegations against RantIT that there was an information leak from its
servers, which led to the private data of Ranters being available to the public at large,
especially to the world of dark web. RantIt’s Board of Directors did a quick damage control
by refuting all such claims, but it's share price had taken a significant hit by then. Kluger
was the first major personality to comment on it. She Ranted “Tired of Ranting, let's call it
quits here” thereby effectively announcing that she no longer had any interest in pursuing
the deal with RantIt.

10. The RantIt’s Board of Directors was tense with this turn of events but at the same time, it
was not completely unexpected for them owing to Kluger’s history. However, holding onto
the last shred of hope to materialize the deal, RantIt issued a public statement, “Just like
the entire world, we, at RantIt, were interested in the offer made by a young, enthusiastic
entrepreneur - Ms. Daphne Kluger who had shown genuine interest in having a stake in
our company. We hope to put behind us the recent turn of events and to effectively engage
with Ms. Kluger in furtherance of this deal.”

11. RantIt then contacted Kluger for an urgent meeting. It wanted to know why Kluger decided
to pull back the offer even before RantIt could give any sort of preliminary reply to it.
Kluger, who is facing tremendous public backlash in the media and industry, is
apprehensive about her influential position crumbling down. With the desire to regain her
deteriorating reputation, she is ready to hold onto any opportunity that would enable her to
consolidate her position. Hence, reluctantly, she decided to meet RanIt’s representatives.

12. Pursuing a common interest of survival, RantIt has invited Kluger for a negotiation session
to deliberate on the prospect of the deal. The negotiation session is scheduled to be held on
23rd of September 2022 at the India Law Society’s Center for Arbitration and Mediation.
It will be attended by Mose Schrute, the CEO of RantIT along with Gautam Bambani, the
 representative of the private shareholders. Daphne Kluger will attend in person along with
her legal counsel.

[This imaginary problem has been drafted for the purpose of the 11th ILS Intra-College
TheNegotiation Challenge, 2022, by Savani Budhkar, Khushi Patel (III BALLB), Shakshi
Swarnkar (II LLB), Gautam Garg, Sanaya Khadiwala, Krishna Purwar, Tejita Wadode (IV
BALLB), Yogesh Mourya (III LLB), Anoushka Gahilot, Tejas Bhonge, Hitanshu Patil, Shantanu
Sohoni (V BALLB).]