Should a team of investors, under pressure to enter a $4.5 million "bad boy" guarantee, acquire a warehousing company in Argentina?
Should a team of investors, under pressure to enter a $4.5 million "bad boy" guarantee, acquire a warehousing company in Argentina?
In 2009, in the midst of the international financial crisis, Benjamin Griswold and his team of investors were days away from purchasing a warehousing company in Argentina for $14.5 million. Shortly before the closing, the New York-based private equity firm that was selling the property demanded that Griswold personally enter into a $4.5 million "bad boy" guarantee that Tigre Logistica, once acquired, would not engage in activities that could put at risk the seller's collateral package for its financing. Griswold had promised himself he would never enter any such agreement, but the warehouse represented two years of work, several hundred thousand dollars of research and legal costs, and a $191,000 option payment he'd already made to the private equity firm. In this case, students weigh the risks and opportunities as Griswold negotiates the deal.