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
purpose (if easterly wins)
Estimated % parcel price change after cou
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)
We are frozen out and Brims sells the parcel for residential
2 purpose to another party
Expected Value of winning
Possible outcomes if we Lose
1 Brim Builds a coffee shop
2 Brims sells the parcel to us (we outbid other commercial bidders)
We are frozen out and Brims sells the parcel for commercial
3 purpose to another party
Expected value of losing
Net Expected value of Court option after applying discount rate

Was out of court settlement better for us? Why?

At what price you would be indifferent between court case and
out of court settlement
With Hindsight how different our negotiation could have been?
What could be our BATNA?
to 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 Win: Commercial use Not OK
y wins) -10%
l price change after court case for commercial
ins) W Pe
10%
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)

Financial implication
Probability for us Expected Value Explanation of financial implications
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
q
se Not OK

Pe Easterly outbids other

Residential buyers

rly 100K
(1-q)
Brim builds coffee shop
r1 Business loss + CC
se: Commercial use OK
Brim sells to other

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