ZWhat individuals or groups have an important stake in this case? Do some have greater stake because of special need or obligation? a. Nigel Darwani: The current appraiser. Has had Smithson Development, the owner of The Pipoilo Hotel, as a client for many years. Nigel also has proposals with the developer for other projects. Nigel needs to consider future business with Smithson Development as well as his reputation as an appraiser. b. Ed: Management of The Apollo Hotel. He convinced his partners to develop the hotel at the objection of some senior parhiers due to the risk of standard hotel invesh'oents. His credibility is on the line. c. Smithson Development: The developer of The Apollo Hotel. If the appraisal is not favorable, they will not be able to maintain their current nancial agreement with the bank If the appraisal is too low, they may be required to pay down a large part of the principal of the financing they have received. If occupancy and revenue projections are too low, the bank would trigger a clause in the agreement to renegotiate the rate. d. The Bank: The bank needs to ensure that Smithson Development's obligations can be met. The bank's goal would be to not overexpose itself to risk. Risk management is very important to banks. Their ability to manage risks affects investors' decisions. Governments also rely on risks posed to banks to develop regulations. An unfavorable reappraisal may indicate a risk of loss that could occur from the failure of Smithson Development not being able to abide by the terms and conditions of their contract. The banks take into consideration the nancial position of the hotel, the hotel's relative market position and operating efficiency, certain industry conditions and characteristics, and the competitiveness of the industry in order to determine risk exposure. The appraisal will help them detemune these factors. Smithson Development seems to have the greatest stake in this case because it would impact The Apollo Hotel. If new rates are negotiated that are unsustainable for the hotel, they may not be able to maintain operations. If that occurs, many people will be out of a job and