Sweetheart deal

It is a kind of abnormal contract made secretly between two parties often associated with mergers and acquisitions jobs or in different types of investment options that provide inappropriate benefit to the involved parties.

Such contracts are made under the political influence or through lobbying, using negotiation power, or offering benefits like employment to the government agent.

The merger booms led to the use of word sweetheart deals where the company would use unusual methods for the ready to be sold the unit to persuade the other party to get away from the deal.

They, sometimes, made use of “poison pills” or deliberately reconstructed the whole plan to reduce its attraction to the bidder. 

The director of the firm may involve in such deals where they would sell the best bits of the firm on favorable terms to benefit personally. The contract would compensate the directors or the involved management or a few employees with perks. 

In 2019, the 19th-century lighthouse, the centerpiece of US President’s Trump Turnberry hotel and golf resort, that was billed as one of the finest suites with the use of marble, gold, and mahogany by the global real estate investment experts.

It is owned not by Trump but by the Northern Lighthouse Board of Edinburg and it was described to be a sweetheart deal that linked Trump brand to Scotland where NLB has a lengthy lease deal with Mr. Trump’s firm.