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Negligence In Hotel California

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Hotel California
Introduction
The law of negligence views negligence as an intentional tort where the defendant acts wrongfully, not in implication to cause harm but acting in such a way as without sufficient concerns for the interests of others (Feinman, 2014). In this scenario, the injured victim suffers loss and it seems fair-minded that the careless tortfeasor who caused the harm to the victim, should bear the burden of the resulting loss. Ms. Warren suffered harm in terms of a lost opportunity to acquire the first Palm Desert Hotel due to the negligent failure by her mortgage lender, Mechanics National Bank to promptly remove the lien on her Lagoon Beach property. This paper is a report to Legal Eagles LLP, the firm handling Ms. Warren’s …show more content…
Rebecca Warren a former manager of fifteen years at Marriot Hotel in Newport Beach California had intentions of owning an existing hotel in Palm Desert in the state of Green and convert it to a bed and breakfast inn. She identified Hotel California as a suitable option and a listing agent of the hotel, Babak Gordon listed it for sale for $4.5 million. Out of conducting her own valuation and due diligence, Ms. Warren was offered the property, excluding the furniture for $4.3 million, a sale which was to conclude following a 45-day escrow. Ms. Warren managed to obtain a financing commitment, a 60-day firm commercial loan from Bank of the West with a first priority lien on the hotel property attached to it. Ms. Warren lost this financing opportunity as her earlier lender to her Lagoon Beach property negligently failed to remove the lien it had on this property despite Ms. Warren paying off her loan with them in full. After failing to obtain financing from Bank of the West and losing out on California Hotel to other buyers, Ms. Warren located and acquired another hotel within Palm Desert at $4.7 million excluding the …show more content…
Warren’s Lagoon Beach property resulted into her incurring damages of lost opportunity to acquire California Hotel, the first Palm Desert hotel she had identified. In terms of valuation and analysis of its cash flows, California Hotel was a more profitable option given its increasing revenues and profit from 2002 to 2004 of $931,579 to $979,695 to $1,104,945, and $177,000 to $215,533 to $265,187 respectively. According to Needles and Powers (2011) a company’s historic financial data may not be as accurate as thought and can sometimes lead to under- and overvaluation since manages prepare them to either to minimize or maximize profits depending on a firm’s size. In acquisition scenarios it is highly recommended that buyers carry out their own due diligence to verifier the information provided by the seller. Ms. Warren conducted her own due diligence and got Hotel California at reduced price of $4.3 million.
The time value of money factor argues about recognizing the worth of future cash flows that come as a result of financial decisions through taking into consideration the fund’s opportunity cost (Needles & Powers, 2011). In this sense the value of money to be received in the future is far less than the value of money in hand today. When taking into consideration this concept of time value of money, Ms. Warren has lost in excess of approximately $0.7 million by losing out on the opportunity to buy California

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