The Business Conflict: Red-Holdings Case Essay

Exclusively available on Available only on IvyPanda® Made by Human No AI

Brief Analysis

Business relationships between companies are based on an honest partnership and perceived fairness on both sides; otherwise, there is a conflict between the principals. A similar situation characterized the agreement between Red-Holdings and Bluelands, who agreed (option) in writing to retain the commercial offer and price of $150 million for the sale of the Miami Beach site. With the exception of drinking wine while making strategic business decisions, the negotiations so far have been successful as the interests of both parties have been considered. Although Red-Holdings initially offered a 66 percent lower price, it was in the Bluelands’ power and responsibility to set their price. Twenty days after the agreement, however, the option, valid for at least another ten days, is unilaterally terminated by Bluelands and the commercial offer is no longer valid.

A close reading of this case reveals several described legal nuances that ultimately caused the business conflict. First, Red-Holdings is structured as a publicly-traded company, which means that critical decisions are made by the board of directors (Kenton, 2021). The CEO in this system is a nominal figure who cannot make such grandiose purchases on his own without the consent of all shareholders (De Smet et al., 2021). In fact, when the head of Red-Holdings handed a $10,000 check to a Bluelands director, it was an act based on a business trust. The Red-Holdings CEO attempted to book the purchase opportunity and hoped for Bluelands’ honesty, but there was little validity to such an agreement. This also applies to the second side: the head of Bluelands did not have the right to decide on his own to freeze the price for a period of one month.

Second, the fact that the head of Bluelands quickly cashed the check confirms fraudulent intent on his part. Realizing that he had defrauded the general manager of the partner company, Bluelands tried to get the money in cash as soon as possible so that no further movement would be recorded. Thus, raising the price for the site from $150 million to $200 million is not legally improper because the original written agreement on paper between the two drinking directors had no official meaning. This may have been unfair and unpleasant to the director of Red-Holdings, whose trust was undermined, but strictly speaking, there was no violation of law in such a “breach” of a written agreement. The main problem, therefore, was the substitution of notions in the signing of the agreement between the directors, although they did not have the exclusive right to decide the commercial destiny of the company.

Outcomes

The current situation has several options for its development, which depend entirely on the intentions of the parties involved. The intervention of the billionaire Tom Richboy has created pressure because it has accelerated deadlines, the need to make decisions faster, and in either case, to disappoint one of the parties. For example, if Bluelands management decided by a majority shareholder vote to retain its business relationship with Red-Holdings and return the $150 million value, it would cause problems with Tom Richboy. Likewise, the opposite is true: selling the site for $200 million would set a precedent for conflict with Red-Holdings, who already feel cheated.

From this perspective, the outcome of this scenario depends on the Bluelands’ intentions: either to preserve Red-Holdings’ business credibility or to enrich themselves with Tom Richboy’s help. In addition, the CEO of Red-Holdings may try to sue the CEO of Bluelands because their personal agreements, backed by a monetary alliance, have been violated. These are the terms of an interpersonal business conflict in which the Bluelands CEO stole money from Red-Holdings by failing to fulfill his part of the written agreement (Pantekoek, 2020). However, the judicial resolution of this conflict is not expected to lie between Red-Holdings and Bluelands.

References

De Smet, A., Lund, F., Weiss, L., and Nimocks, S. (2021). . McKinsey. Web.

Kenton, W. (2020). . Investopedia. Web.

Pantekoek, K. (2020). . FindLaw. Web.

More related papers Related Essay Examples
Cite This paper
You're welcome to use this sample in your assignment. Be sure to cite it correctly

Reference

IvyPanda. (2023, January 6). The Business Conflict: Red-Holdings Case. https://ivypanda.com/essays/the-business-conflict-red-holdings-case/

Work Cited

"The Business Conflict: Red-Holdings Case." IvyPanda, 6 Jan. 2023, ivypanda.com/essays/the-business-conflict-red-holdings-case/.

References

IvyPanda. (2023) 'The Business Conflict: Red-Holdings Case'. 6 January.

References

IvyPanda. 2023. "The Business Conflict: Red-Holdings Case." January 6, 2023. https://ivypanda.com/essays/the-business-conflict-red-holdings-case/.

1. IvyPanda. "The Business Conflict: Red-Holdings Case." January 6, 2023. https://ivypanda.com/essays/the-business-conflict-red-holdings-case/.


Bibliography


IvyPanda. "The Business Conflict: Red-Holdings Case." January 6, 2023. https://ivypanda.com/essays/the-business-conflict-red-holdings-case/.

If, for any reason, you believe that this content should not be published on our website, please request its removal.
Updated:
This academic paper example has been carefully picked, checked and refined by our editorial team.
No AI was involved: only quilified experts contributed.
You are free to use it for the following purposes:
  • To find inspiration for your paper and overcome writer’s block
  • As a source of information (ensure proper referencing)
  • As a template for you assignment
Privacy Settings

IvyPanda uses cookies and similar technologies to enhance your experience, enabling functionalities such as:

  • Basic site functions
  • Ensuring secure, safe transactions
  • Secure account login
  • Remembering account, browser, and regional preferences
  • Remembering privacy and security settings
  • Analyzing site traffic and usage
  • Personalized search, content, and recommendations
  • Displaying relevant, targeted ads on and off IvyPanda

Please refer to IvyPanda's Cookies Policy and Privacy Policy for detailed information.

Required Cookies & Technologies
Always active

Certain technologies we use are essential for critical functions such as security and site integrity, account authentication, security and privacy preferences, internal site usage and maintenance data, and ensuring the site operates correctly for browsing and transactions.

Site Customization

Cookies and similar technologies are used to enhance your experience by:

  • Remembering general and regional preferences
  • Personalizing content, search, recommendations, and offers

Some functions, such as personalized recommendations, account preferences, or localization, may not work correctly without these technologies. For more details, please refer to IvyPanda's Cookies Policy.

Personalized Advertising

To enable personalized advertising (such as interest-based ads), we may share your data with our marketing and advertising partners using cookies and other technologies. These partners may have their own information collected about you. Turning off the personalized advertising setting won't stop you from seeing IvyPanda ads, but it may make the ads you see less relevant or more repetitive.

Personalized advertising may be considered a "sale" or "sharing" of the information under California and other state privacy laws, and you may have the right to opt out. Turning off personalized advertising allows you to exercise your right to opt out. Learn more in IvyPanda's Cookies Policy and Privacy Policy.

1 / 1