# Negotiating equity split and structure for Coyote deal

**February 25, 2026 at 09:32 AM** · 82m 36s · Participants: JD Busfield, James Adcock, James Adcock

### Bottom Line
The team debated and aligned on a negotiation strategy for the Coyote deal, focusing on justifying a low equity stake (targeting 80/20) for Coyote by arguing their assets are loss-making and the post-transaction value is created by Packet Co.'s operational expertise and risk-taking.

### Key Takeaways
- **Equity Negotiation Strategy:** The team will argue Coyote deserves a minority stake because their contributed assets are loss-making, and Packet Co.'s operational know-how and risk assumption create all future value.
- **Asset Valuation Framework:** They will present a defensible range, showing Coyote's pre-transaction assets have minimal value and that a higher stake would require them to assume more risk or contribute cash.
- **Transaction Structure:** The cleanest approach is to contribute specific assets (not entire entities) into a new asset company to avoid successor liabilities and administrative friction, pending tax review.
- **Coyote's Motivation:** The deal's intangible benefits for Coyote (offloading risk, union liabilities, and unprofitable operations) are key to their motivation but won't be used to justify valuation on paper.

### Action Items
- [ ] Distill the equity negotiation strategy and structural proposal into bullet points and a draft term sheet for Coyote. — @JD B `high`
- [ ] Prepare the requested deliverables for Coyote (lease schedule, headcount, insurance breakdown, etc.) as discussed. — @JD B `high`
- [ ] Ask Coyote/Stephanie for clarification on why they have asset companies and the potential tax implications of moving assets. — @James Adcock `medium`
- [ ] Gather and understand the scope of Coyote's union agreements (LA commercial, NY commercial, fleet) to assess potential liabilities. `medium`
- [ ] Finalize the list of Packet Co. entities and assets to be contributed, confirming which should be contributed as entities vs. assets. `medium`

### Topics
Equity Split Negotiation, Asset Valuation, Transaction Structure, Tax Considerations, Union Agreements, Org Chart / Entities

**Sentiment:** neutral

---
*Generated by Call Assistant on 2026-04-09 11:44*