By Andrew Cohen
Seated across a small table from one another before a large crowd of fellow students, the Halloum Business Competition’s top two teams waged a fitting final round.
How closely contested was their mock negotiation? Berkeley Law’s Kurt Kurzenhauser ’19 and Haas School of Business student Claudia Luck won a split decision of the three judges, while their opponents Elizabeth Hall ’20 (Berkeley Law) and Chi Zhang (Haas) won the audience vote.
The unique competition teams a law student with a business student to negotiate a complex transaction with other such duos. Participants are judged on their ability to work cooperatively—both alongside and across the negotiation table—and to skillfully advocate for their side’s main goals. At Berkeley Law, the competition is open to all second- and third-year JD students and all LL.M. students.
“Probably the most difficult and ultimately rewarding component is the constant creativity required,” Kurzenhauser said. “Negotiators have to do more than say what they want, they have to convince the other side of why what they want is important. We have to constantly think on the spot, and it sure is exhilarating.”
The last teams standing of the 22 who began the competition delivered a nuanced and impressive final negotiation. It involved a potential acquisition in which Sola Soda (a established large beverage company sold in 150-plus countries) would purchase Greenhaus (an up-and-coming cannabis brewery popular with millennials) to expand its product line into cannabis-infused beverages.
The parties were tasked with working toward agreements in areas such as purchase price, stock options for incoming Greenhaus employees, and whether Greenhaus could expressly solicit a competing offer from other interested companies.
Throughout the competition, Hall enjoyed “rapidly learning about mergers and acquisitions. Two weeks prior to the final, I would not have been able to follow the technical terms of the deal we negotiated in the last round.” She also appreciated the judges’ feedback and being “able to immediately implement it in the next negotiation. We felt we were becoming better advocates and negotiators after each round.”
Working to make a deal
During the final round, Hall and Zhang promoted Greenhaus’ wish to leverage the company’s valuable distilling method patent it had recently secured. Meanwhile, Sola Soda sought assurances that rumors about a competitor potentially acquiring Greenhaus were not cause for concern.
The issue of stock options produced another respectful but pointed discussion. Kurzenhauser described why Sola Soda preferred that all stock options of incoming Greenhaus employees be rolled over into Sola Soda’s share options—namely concern that they might cash them out and not stay with the newly expanded company.
Hall said Greenhaus preferred an immediate liquidity option on at least some shares because “our employees’ scientific knowledge is our greatest asset. …“Giving the choice to accelerate invested shares into a payout or roll shares into Sola Soda stock would make them feel valued. If they’re forced into one option or the other, it could have negative consequences for their confidence in the acquisition.”
The two sides also debated the proper criteria for projecting a company’s valuation, and the impact of an uncertain regulatory landscape regarding cannabis-infused beer. “Our concern is that there is some regulation pending and some firewalls that may make business more tenuous,” Kurzenhauser noted.
Introducing the competitors, Berkeley Law lecturer in residence William Fernholz ’93 applauded how the Halloum Competition brings law and business students together. “You’re going to be collaborating throughout your career—why not start now?” he said.
Kurzenhauser confirmed the benefits involved such collaboration. “Perhaps the greatest is the chance to interact with both MBA and LL.M. students,” he said. “Students in both programs tend to have a lot of relevant real-world experience that creates a very high level of competition.”
Kirkland & Ellis partner Joseph Halloum ’10, Berkeley Center for Law and Business Executive Director Adam Sterling ’13, and Berkeley Law lecturer Clinton Waasted judged the competition and made comments after the final round.
“Both teams hit on the right points,” Sterling said. “You rolled with the punches and asked all the right questions.”