SCENARIO

In March $1985,$ Anthony Johnson was working on a proposal to purchase

his employer$$s firm, the Case Company. The Case Company, with

corporate headquarters in Dover, Delaware, was a leading manufacturer

of commercial desk calendars. Mr$.$ Johnson, vice president of finance and

administration, considered the company an excellent acquisition

opportunity, provided the owner$$s asking price was acceptable and

satisfactory financing for the transaction could be arranged.

Background

A few weeks earlier, John M Case, board chairman, president, and sole

owner of the company, had informed his senior management group that

he intended to retire from business and was about to initiate a campaign

to sell the company. For several years, his physician had been urging him

to avoid all stress and strain; now Mr$.$ Case had decided to sever his

business connections and devote his time to travel and a developing

interest in art history and collection