Case 1: Capital Mortgage Insurance Company

In: Business and Management

Submitted By chaningq
Words 1168
Pages 5
Case 1: Capital Mortgage Insurance Company

Overview

This case is set in the late 1970’s and describes an acquisition attempt by Capital Mortgage Insurance of Corporate Transfer Services. CMI is a company that sells mortgage insurance to mortgage lenders and banks but executives at CMI want to grow into the real estate relocation industry. Corporate Transfer Services assists employees who have been transferred to a new city as they try to find a new home. Capital Mortgage Insurance Corporations goal is to acquire Corporate Transfer Services at the lowest cost.

The president and vice president of CMI met with the owners of CTS many times. If CMI acquires CTS, it will provide them with an easy way into the relocation industry and a high potential for profit. This makes the acquisition appealing to CMI, regardless of the fact that financially, CTS has been struggling to break even. Corporate Transfer Services wants to be acquired, but is worried about their ownership levels after the acquisition.

Analysis

Capital Mortgage Insurance Company’s main interest is to expand their financial services capabilities and build a strong network that can rival Merrill Lynch. Growing at a 10-15% annual rate, the corporate relocation business was a very appealing market. CMI has to protect their close relationship with MetroNet, with which Elliott Burr sat on the board. MetroNet proposed and approved the acquisition attempt of CTI. Preservation of good relationships with the CTS owners makes a collaborative strategy easier to implement for future success.

Capital Mortgage Insurance Company’s initial offer for Corporate Transfer Services was $820,000 with a reservation price of $1,020,000. CMI’s offer fixed a 100% stake in CTS and that Thomas Winder, a key manager, would relocate to Philadelphia to run the business. CTS heads would also have to agree to sign a…...

Similar Documents

Lakeside Company: Case 1

...Lakeside Auditing Case Study Case 1 Prepared by: January 27, 2011 1: An independent annual audit can provide credibility to information, and this could be very helpful for decision making. In this specific case, the owner of the Lakeside requires an independent CPA firm to perform an annual audit because the owner wants to show the public a “good-look” of its financial statements; since he would like to receive more capital by making his company public. In addition, good-looking financial statements of the company could provide good credit from the bank. To the lakeside company, the owner would like to provide audited financial statement to the bank to obtain the loan and receive the best possible interest rate. On the other hand, a decision by a bank loan officer about whether to make a loan to Lakeside Company and what rate of interest adequately compensates the bank for the level of risk assumed depends on an independent auditing report about lakeside’s financial reports. An auditing report about the company is reliable for the bank; it can significantly reduce the level of information risk. If the loan officer has assurance from the auditors that the company’s financial statements are prepared in accordance with GAAP, he or she will have more confidence in his or her assessment of business risk. By reducing information risk, the audit reduces the overall risk to the bank. 2: According to GAAS, the auditor must obtain a sufficient understanding of the entity......

Words: 1450 - Pages: 6

Capital Mortgage Insurance Corporation (

...Negotiations 246 | Capital Mortgage Insurance | Group Position Paper 1Arin HalickiAmit ShahHelen KimSatish Ramachandran10/31/08 | Overview Capital Mortgage Insurance Corporation (CMI) sells insurance to lenders protecting against mortgage default losses. They are a wholly owned subsidiary of Northwest Equipment Corporation. Following their acquisition in 1978, CMI’s goal has been to rebuild their business and diversify their services. The Senior VP and Treasurer at CMI, Jim Dolan, discovered that corporate employee transfers will be a source of stable business and profitability for a long time to come (Lewicki 577). Merrill Lynch (ML) holds the lion’s share of the relocation services market. In alignment with their vision of growth and diversification, CMI sees value in entering the relocation services market. Entry could round out their overall service offering and allow them to better compete with ML. Thus the CMI vision to create a “residential real estate financial services company” (Lewicki 576) was born. Frank Randall, the President of CMI started looking for potential acquisitions. He contacted, David Osgood, executive director of the Metropolitan Realty Network. MetroNet facilitated referrals of relocated homebuyers with brokers in the new locations. They also believed that employee relocation services would be a source of stable income once a broker establishment was achieved. The company’s current relationship with a Chicago-based relocation......

Words: 1581 - Pages: 7

Capital Mortgage Insurance

...Ben Smith March 19, 2013 MGT 483 CMI Case Analysis Frank Randall, Jim Dolan want to purchase the outstanding stock of Corporate Transfer Services(CTS). Randall and Dolan flew to Chicago to meet with the people from CTS. Randall and Dolan strategy was to pay a purchase price of $400,000 above the audited net worth of $420,000 book value of CTS's net worth. Elliot Burr was not satisfied with that price what so ever. Burr was initially expecting $5 million dollars for CTS. Burr then suggested that they skip the price issue for a bit. Michael Kupchak was not available for the meeting. Burr stated that he had Mikes proxy and he would sell it for 3.5 million which was there reservation point. Randall was still upset at that figure. Burr, Lehman and Winder then announced they would sell it for $2 million. Burr then wanted to workout a deal where he wanted some money now and then more in the future. Dolan said that he would pay the net worth now and a fixed dollar payout in the future. Randall and Dolan went back to there hotel to get some dinner and do some thinking. Elliot Burr started calling them but they ignored the phone calls and went to bed. Dolans phone rang in the morning and it was Burr. Burr met up with the two of them before they left. Burr replaced his $400,000 reservation point offer with a $1 million offer. Nothing was settled Randall and Dolan headed back home. Burr tried contacting Randall several times over the next few weeks, Randall ignored most of......

Words: 424 - Pages: 2

Rainyday Insurance Company a Case Study

...RAINYDAY INSURANCE COMPANY A CASE STUDY Based in South Florida, Rainyday Insurance Adjusters is a medium-sized company with 135 employees and seven managers. They process the claims of insurance holders who have experienced various misfortunes (eg: Hurricanes, floods etc). Their primary job is to determine the amount to be paid out and process the paperwork for some of the smaller insurance agencies in the area so that the final payment can be issued. Although the company is just eight years old, it has done quite well and has seen a large increase in business. It has a reputation for quality work and quick turnaround for claims. Because customers are often eager to move on after the misfortune strikes, Rainyday has built a loyal following by the insurance agencies that depend on it. Delayed claims often cost these companies’ time and money when they have to interact with continuous customer complaints. To accommodate the increase in customers, six months ago, Rainyday expanded its office in the current building and upgraded all its equipment to make the company more efficient and to allow the workers to process the claims more quickly. In particular, the computers were upgraded to facilitate speedier turn-around and higher capacity from claims processors. The new computers represent a large investment the company cannot afford to underutilize. Since installation of the computers, Rainyday has experienced a number of problems with voluntary turnover among claims processors as...

Words: 990 - Pages: 4

Delta Life Insurance Company: Case Study

...Preface The study attempts to evaluate the performance of the private life insurance companies of Bangladesh, mainly I highlight the delta life insurance company. Insurance is a technical device of risk management. Risk taking is the sixth function of marketing and marketing is an important insurance function. It is a total system of business activities designed to plan, price promote and distribute want satisfying products, services and ideas to target markets in order to achieve organizational objectives. In the United States about 87% of the business is service oriented. In our country about 65% business activities are service oriented. Development of Business depends on the degree of service provided by the companies. Retention of customer depends on the relationship and service of the companies. Customer Relationship management is the widely popular marketing term that has given tremendous impact among the modern customer. Delta Life insurance Co. Ltd. who is deals with insurance business has now turn into service oriented organization to meet the demand of the 21st century as the competition has got momentum. Insurance is one of the important sectors that are playing a vital role in the economic development of the country. An attempt has been made to discuss the whole topics in two distinctive sector- organization related matter and marketing strategy respectively. Insurance industry is one of the strategic sectors in the country Acknowledgement is due to Dr. Afjal......

Words: 5472 - Pages: 22

Case 4.2 - New Jersey Insurance Company

...Management Control System Dosen: Rusdi Akbar, PhD, Ak., CMA, CA Case #4-2 New Jersey Insurance Company EKSEKUTIF B 28 A Team #06 Irwandi Panggalo Luisa Amanda Marshall Ohan Silitonga UNIVERSITAS GADJAH MADA JAKARTA 2015 I. Problem Statement 1. Jenis organisasi (types of organizations) Strategi sebuah perusahaan sangat dipengaruhi oleh struktur organisasinya, hal ini dikarenakan struktur sebuah perusahaan sangat berpengaruh bagi sistem pengendaliannya (control system). Ada tiga jenis tipe struktur organisasi, yaitu Functional structure, business unit structure, dan matrix structure. Jika melihat struktur organisasi dari New Jersey Insurance seperti yang terdapat pada exhibit 1, maka diketahui bahwa jenis struktur yang mereka terapkan adalah business unit structure, dimana struktur dibagi berdasarkan tanggungjawabnya masing-masing (per unit bisnis) dan unit bisnis ini dikendalikan oleh unit manager sebagai perpanjangan tangan manajemen. selain itu terdapat 5 sub divisi, dimana masih terdapat pembagian berdasarkan wilayah untuk sub divisi itu sendiri. Karakteristik dari struktur organisasi ini yang dapat berdampak atau mempengaruhi sistem pengendalian suatu organisasi adalah: a. Berfokus pada banyak tanggungjawab b. teknik pengendalian yang digunakan c. Standard yang digunakan untuk mengukur kinerja dari unit menejer Yang menjadi kendala disini kenapa sistem pengendalian tidak berjalan lancar adalah: a. Struktur organisasi di perusahaan ini memiliki banyak unit bisnis,......

Words: 1269 - Pages: 6

Hrm 595 Week 5 Case Study 1 Capital Mortgage

...HRM 595 WEEK 5 CASE STUDY 1 CAPITAL MORTGAGE To purchase this visit following link: http://www.activitymode.com/product/hrm-595-week-5-case-study-1-capital-mortgage/ Contact us at: SUPPORT@ACTIVITYMODE.COM HRM 595 WEEK 5 CASE STUDY 1 CAPITAL MORTGAGE HRM 595 Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment HRM 595 Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment Activity mode aims to provide quality study notes and tutorials to the students of HRM 595 Week 5 Case Study 1 Capital Mortgage in order to ace their studies. HRM 595 WEEK 5 CASE STUDY 1 CAPITAL MORTGAGE To purchase this visit following link: http://www.activitymode.com/product/hrm-595-week-5-case-study-1-capital-mortgage/ Contact us at: SUPPORT@ACTIVITYMODE.COM HRM 595 WEEK 5 CASE STUDY 1 CAPITAL MORTGAGE HRM 595 Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment HRM 595 Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment Activity mode aims to provide quality study notes and tutorials to the students of HRM 595 Week 5 Case Study 1 Capital Mortgage in order to ace their studies. HRM 595 WEEK 5 CASE STUDY 1 CAPITAL MORTGAGE To purchase this visit following link: http://www.activitymode.com/product/hrm-595-week-5-case-study-1-capital-mortgage/ Contact us at: SUPPORT@ACTIVITYMODE.COM HRM 595 WEEK 5 CASE STUDY 1 CAPITAL MORTGAGE HRM 595 Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment ...

Words: 777 - Pages: 4

Capital Mortgage Insurance Corporation

...Capital Mortgage Insurance Corporation The following are a few guidelines to follow when entering into negotiations with Corporate Transfer Services (CTS): 1. Identify what is important to the organization, Capital Mortgage Insurance Corporation (CMI). 2. Be willing to make small concessions towards CTS. This helps to establish a spirit of co-operation while allowing CMI to stand firm on its main issues and gain accommodation from CTS. 3. Plan for obvious reservations from CTS. Though the four CTS owners a in a positive frame of mind, negotiations can at times bring about the worst in others. Steps in the negotiation process to be utilized are: 1. Be prepared: know what your organization wants and understand what the opposition is seeking. 2. Presentation: open your side up for them and openly listen to their needs and wants. 3. Justification: support the needs of your organization and expose the weakness in theirs. 4. Explore: understand their organization’s needs and wants and find ways to make the needs of both parties come together. 5. Show: present areas in which your organization is willing to concede in order to form a better working relationship. 6. Present: possible solutions which take into consideration all points presented by both sides. 7. Wrap it up: form a plan in which the needs of both sides are met. 8. Take action: realization of the plan negotiated. Often times during this part I am reminded of persuasive......

Words: 801 - Pages: 4

Hrm 595 Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment

...Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment Purchase here http://devrycourse.com/hrm-595-week-5-case-study-1-capital-mortgage-insurance-corporation-assignment HRM 595 Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment Purchase here http://devrycourse.com/hrm-595-week-5-case-study-1-capital-mortgage-insurance-corporation-assignment Product Description HRM 595 Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment HRM 595 Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment Purchase here http://devrycourse.com/hrm-595-week-5-case-study-1-capital-mortgage-insurance-corporation-assignment Product Description HRM 595 Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment HRM 595 Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment Purchase here http://devrycourse.com/hrm-595-week-5-case-study-1-capital-mortgage-insurance-corporation-assignment Product Description HRM 595 Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment HRM 595 Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment Purchase here http://devrycourse.com/hrm-595-week-5-case-study-1-capital-mortgage-insurance-corporation-assignment Product Description HRM 595 Week 5 Case Study 1: Capital Mortgage Insurance Corporation Assignment HRM 595 Week 5 Case Study 1: Capital......

Words: 430 - Pages: 2

Case 1 Company

...thriving young airline with a strong reputation for outstanding service. In fact, the low-fare airline referred to itself as a customer service company that just happened to fly planes. But in Valentine's Day 2007, JetBlue was hit by the perfect storm-literally-of events that led to an operational meltdown. One of the most severe storms of the decade covered JetBlue's main hub at New York's John F. Kennedy International Airport with a thick layer of snow and ice. Small JetBlue did not have the infrastructure to deal with such a crisis. The severity of the storm, coupled with a series of poor management decisions, left JetBlue passengers stranded in planes on the runway for up to 11 hours. Worse still, the ripple effect of the storm created major JetBlue flight disruptions for six more days. Understandably, customers were livid. JetBlue's efforts to clean up the mess following the six-day Valentine’s Day nightmare cost over $30 million dollars in overtime, flight refunds, vouchers for future travel, and the other expenses. But the blow to the company's previously stellar customer-service reputation stung far more than the financial fallout. JetBlue became the butt of jokes by late night talk show hosts. Some industry observers even predicted that this would be the end of the seven-year-old airline. But just three years later, the company is not only still flying; it is growing, profitable, and hotter than ever. During the recent economic downturn, even as most competing......

Words: 1863 - Pages: 8

Assignment #2 – Case: “Allstate Insurance Company”

...Assignment #2 – Case: “Allstate Insurance Company” The goal setting seems in line for managers to create and foster a diverse employee arrangement to complete all the company missions. Allstate is a company with a diverse clientele and therefore requires a diverse workforce. One reason is to get a full understanding or appreciation for cultures and people they service and to be able to connect with them on a more personal level. This is the goal for management to achieve. It is the employee’s goal to penetrate their respected market segments. Allstate accomplishes their goals by understanding the strength and importance of a diverse work force. Allstate’s workforce is a multi cultural and multi lingual company which gives them the competitive advantage they need to remain successful. By applying the model for goal setting, we see the companies challenge is to be able to reach a wide and diverse market. The goal is clear for management; they are to assemble a diverse group, penetrate market areas, and complete company objectives. To reduce the difficulty of this, mangers will recruit and hire direct matches for the objectives at hand. The ability of the assembled group to penetrate the market segment solidifies the goal commitment and can reduce the task complexity. With the continued feedback from employees, mangers can assess how they are reaching these markets and how effective their groups are in reaching those goals. Managers can also use the feedback to update...

Words: 1363 - Pages: 6

Case: “Allstate Insurance Company”

...Assignment #2 – Case: “Allstate Insurance Company” October 30, 2011 The goal setting seems in line for managers to create and foster a diverse employee arrangement to complete all the company missions. Allstate is a company with a diverse clientele and therefore requires a diverse workforce. One reason is to get a full understanding or appreciation for cultures and people they service and to be able to connect with them on a more personal level. This is the goal for management to achieve. It is the employee’s goal to penetrate their respected market segments. Allstate accomplishes their goals by understanding the strength and importance of a diverse work force. Allstate’s workforce is a multi cultural and multi lingual company which gives them the competitive advantage they need to remain successful. By applying the model for goal setting, we see the companies challenge is to be able to reach a wide and diverse market. The goal is clear for management; they are to assemble a diverse group, penetrate market areas, and complete company objectives. To reduce the difficulty of this, mangers will recruit and hire direct matches for the objectives at hand. The ability of the assembled group to penetrate the market segment solidifies the goal commitment and can reduce the task complexity. With the continued feedback from employees, mangers can assess how they are reaching these markets and how effective their groups are in reaching those goals. Managers can......

Words: 1366 - Pages: 6

Capital Mortgage Insurance Corporation (a)

...Lewicki−Barry−Saunders: Negotiation: Readings, Exercises, and Cases, Fifth Edition Cases 1. Capital Mortgage Insurance Corporation (A) © The McGraw−Hill Companies, 2007 Case 1 Capital Mortgage Insurance Corporation (A) Frank Randall hung up the telephone, leaned across his desk, and fixed a cold stare at Jim Dolan. OK, Jim. They’ve agreed to a meeting. We’ve got three days to resolve this thing. The question is, what approach should we take? How do we get them to accept our offer? Randall, president of Capital Mortgage Insurance Corporation (CMI), had called Dolan, his senior vice president and treasurer, into his office to help him plan their strategy for completing the acquisition of Corporate Transfer Services (CTS). The two men had begun informal discussions with the principal stockholders of the small employee relocation services company some four months earlier. Now, in late May 1979, they were developing the terms of a formal purchase offer and plotting their strategy for the final negotiations. The acquisition, if consummated, would be the first in CMI’s history. Furthermore, it represented a significant departure from the company’s present business. Randall and Dolan knew that the acquisition could have major implications, both for themselves and for the company they had revitalized over the past several years. Jim Dolan ignored Frank Randall’s intense look and gazed out the eighth-floor window overlooking Philadelphia’s......

Words: 31627 - Pages: 127

Capital Mortgage

...|Managerial Negotiations 584 | |Capital Mortgage Insurance | |Case study | | | |Ray Espinal | | | |06/18/2012 | Overview Capital Mortgage Insurance Corporation (CMI) sells insurance to lenders protecting against mortgage default losses. They are a wholly owned subsidiary of Northwest Equipment Corporation. Following their acquisition in 1978, CMI’s goal has been to rebuild their business and diversify their services. The Senior VP and Treasurer at CMI, Jim Dolan, discovered that corporate employee transfers will be a source of stable business and profitability for a long time to come (Lewicki 577). Merrill Lynch (ML) holds the lion’s share of the relocation services market. In alignment with their......

Words: 1601 - Pages: 7

Capital Mortgage Insurance Final Paper

...Negotiations 246 | | |Capital Mortgage Insurance | |Group Position Paper 1 | | | |Arin Halicki | |Amit Shah | |Helen Kim | |Satish Ramachandran | | | |10/31/08 | Overview Capital Mortgage Insurance Corporation (CMI) sells insurance to lenders protecting against mortgage default losses. They are a wholly owned subsidiary of Northwest Equipment Corporation. Following their acquisition in 1978, CMI’s goal has been to rebuild their business and diversify their services. The Senior VP......

Words: 1587 - Pages: 7