Chapter 7 - THE HARTWELL CONTRACT
Carter Medical’s board argued Hartwell should be excluded.
The agreement was not final.
No guaranteed purchase volume.
Hospital-network approvals still pending.
A conservative valuation might reasonably ignore it.
Priya disagreed.
“Not ignore. Probability-weight.”
She gave it a 45% probability of closing.
That increased projected enterprise value substantially.
Priya built three valuation scenarios for Hannah.
Scenario A:
Hartwell fails.
Estimated 14% value:
$6.9 million to $7.6 million.
Scenario B:
Hartwell partially closes.
$8.1 million to $9.4 million.
Scenario C:
Hartwell reaches most projected volume.
$9.8 million to $11.3 million.
Hannah asked:
“So ten-point-six wasn’t guaranteed.”
“No.”
“Could four-point-one ever be fair?”
“With very aggressive discounts and no Hartwell value, yes.”
Hannah sat back.
That answer frustrated her.
Then Priya added:
“But if the family knew Hartwell was materially more advanced than the internal appraisal assumed, they should disclose that before asking you to elect.”
That distinction became the heart of the valuation claim.
Not:
The family knew the exact future.
They did not.
Instead:
They knew the future might be better than the number they were using and pushed Hannah to decide before she could evaluate that possibility.
The internal appraiser gave it:
0%.
Both could defend their methodology.
Then Grace found a board email.
Richard wrote:
Do not let Hartwell leak into family liquidity pricing until contract is fully signed.
Ethan replied:
Makes sense. We cannot price speculation.
Evelyn replied:
Especially not before Hannah decides whether to sell.
That last phrase mattered.
Not proof of fraud.
But it showed they knew timing could affect Hannah’s price.
Grace asked Evelyn:
“Why did Hannah need to decide before Hartwell signed?”
Evelyn answered:
“Because certainty has value.”
Hannah said:
“To you.”
Evelyn replied:
“To everyone.”
May you like
Again, intelligent.
Again, not enough.
