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Provide methodology for reaching Energy Corporation and Oil Firm consensus on "indemnification buy-out" value.
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Facilitated Energy Corporation and Oil Firm meeting and defined (agreed upon) future risk and mitigation input variables (cost & probability of occurrences). |
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Performed Statistical Simulations and determined "indemnification buy-out" value. |
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$3.3M "buy-out" value agreed upon.
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Oil Firm indemnified assets it sold to Energy Corporation ($10MM cap) . |
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Oil Firm disputed Energy Corporation's first environmental claim based on Energy Corporation's selected remediation approach.
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Energy Corporation proposed "indemnification buy-out" to avoid future legal disputes.
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WIN-WIN -- Energy Corporation received more than expected -- Oil Firm paid less than they could have. |
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Buy-out negotiations were minimized because both parties reached prior consensus on statistical simulation approach and input variables, then let the program calculate the value.
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