Insights | Blog
The Art of the Deal
Barney Frank once said, “the public hates Banks and because legislators hangout with bankers they hate politicians too”. The difference between lenders and borrowers perspectives of each other often leads to irreconcilable differences. Borrowers on one hand believe lenders are unreasonable, over collateralized, manufactured defaults and made promises they didn’t keep. Lenders, on the other hand, when a deal is under performing, often believe the borrower is not trustworthy, their collateral is in danger, lost confidence in management and have too much exposure. The exposure can be industry specific or relate to a lack of collateral coverage.
I often say the worst negotiated settlement is often times better than the best litigation. This is due to a variety of factors many of which are centered on time, money, and outcome. The best way for economic settlement is for candid negotiation with each party understanding what the other side needs to make a deal. Often times neutral or independent parties can bring this result. The cost of the fight is almost never worth the benefit of the fight.
Both parties need to agree on the facts and each party’s capabilities to craft a solution. I have been involved in numerous successful negotiations and those ingredients are always in the recipe. A wise old business partner told me two things about negotiation that I believe are true. It’s a good deal if both parties don’t like it. And lastly, both parties have to walk away tall from the negotiation table. Successful negotiations are never WIN-LOSE. Solutions can be crafted WIN-WIN where everybody gets something.