Midwest Light Company Case Study

1401 Words Aug 29th, 2014 6 Pages
Midwest Lighting Case
Midwest Lighting, (MLI) Inc was a company dealing with the manufacture of customized designed fluorescent light fixtures for commercial, and other institutional applications. This company was formed by Daniel Peterson and Julian Scott in 1956 in Flint, Michigan. Daniel was in charge of the engineering and finance sectors while Walters headed the Sales and design unit of the company. As the company grew, personal differences between the two emerged and Daniel bought out Walters from the company and brought in Richard Scott as his new business partner. Daniel became the treasurer of the company and Scott the company president (Adams & Spinelli, 2012, p. 385).
The company grew tremendously to steady sales of about
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Resolution
To resolve the ownership situation of Midwest Lighting, (MLI) Inc Peterson and Scott have to sit down with their financial managers, evaluate the company and then decide that one of them will buy out the other from the company. And with the history of the company having being formed with Peterson’s father, it would be prudent that Jack Peterson be given the opportunity to buy out Scott from the company since his family only joined in years after the Petersons had started it and bought out Julian Walters.
The company fortunes had grown and therefore buying out a partner wouldn’t be a cheap affair. Peterson therefore; started scanning through his finances and checking out his financial muscles to see whether he could afford to buy out Scott from the company. Financing such an endeavor would need a lot of financial backing since none of the two had the sole capacity to accomplish it alone. Therefore, sources of finances to use would come from financial institutions such as banks using their personal assets as collaterals. Scott had a brother in-law who would be able and willing to help him finance to buying out of Peterson when it got to that point.
Buying out a partner from a company has to reflect the current and potential viability of any company. This means that the Peterson and Scott have to evaluate the company to come up with the asking price to present

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