Every so often, a headline comes along that reminds us how even the most sophisticated players can find themselves on the wrong end of a deal.
Earlier this month, Zions Bancorporation disclosed in an 8-K filing that a major loan relationship involving investment funds tied to the Cantor Group had gone bad. Zions expects to take roughly a $50 million charge-off. That kind of filing isn’t for routine matters — it means the event was material to the bank’s financial position.
To be clear, I’m not taking a position on whether anyone is legally at fault. But it’s fair to say Zions’ expectations weren’t met, and the fallout will be significant. And for clarity, the Cantor Group referenced in news reports is not related to Cantor Fitzgerald.
While most of us aren’t making $50 million loans, many business owners will recognize the same dynamics: you strike a major deal, place trust in a counterparty, and put meaningful capital or business risk on the line. The lessons scale down directly to buying or selling a business, taking on a big customer, or locking in a long-term supplier contract.
1. Know Your Deal Partner — and What Drives Them
At the outset, every deal looks logical. You’ve modeled the numbers, you trust your contact, and the paperwork feels solid. Zions likely felt the same way. But as the bank later learned, the entities and relationships behind the deal were more complicated than they appeared, and the protections they thought they had didn’t hold.
Before you sign a major agreement, go deeper than the glossy pitch deck:
Who exactly are you dealing with? Do you understand the ownership structure and who actually controls performance?
What motivates them? Are they in it for the long term, or a short-term win?
What’s the plan if you’re not getting full payment or performance at signing? If your deal relies on future execution, you’re effectively underwriting the other party.
Did you have someone senior and qualified do that underwriting? Did your accountants, lawyers, or other advisors review the structure and assumptions?
A background check or third-party verification isn’t a sign of mistrust — it’s how you validate that the person across the table truly has the ability and incentive to perform.
2. Even If You Trust Them, Will You Still Be Dealing with Them Later?
Sometimes the deal itself changes hands. People leave, funds sell, and decision-making moves up the ladder. In Zions’ case, it appears some of the entities involved were part of a larger network, and the people at the negotiating table weren’t necessarily the ones in control when things went wrong.
That’s not unique to banks. In smaller transactions, it’s just as common: you sell your business to a private equity group and your trusted buyer gets replaced; or your biggest customer merges, and your contract gets re-interpreted by new lawyers.
Ask yourself:
Is your deal with a person, or with an institution?
What happens if leadership changes or the company is sold?
Have you clearly defined who has ongoing obligations and decision authority?
Has someone really thought through your deal — how it could break, and how someone could work around their obligations?
It’s not cynicism; it’s stress-testing your agreement before someone else does.
3. Protect Yourself If You’re Wrong
Even when you’ve done everything right, people and markets change. Zions surely had seasoned professionals and documentation in place — and yet it still took a major loss. The lesson isn’t that diligence fails; it’s that risk never goes away. It only shifts.
The question is whether you can shift it away from you.
Escrow funds until key conditions are met.
Require a letter of credit or guarantee to back up future payments.
Hold back a portion of the price until post-closing targets are met.
Buy insurance where it’s available — for representations and warranties, key contracts, or even business interruption.
In other words, if you turn out to be wrong, can you limit the damage to something survivable?
The Takeaway
Zions’ $50 million write-off isn’t about bad luck or missing a clause in the fine print. It’s a reminder that even large, sophisticated players can see their expectations collapse when counterparties act in ways they didn’t anticipate.
For small and family businesses, the same rules apply — just with fewer zeros.
Know your partner. Stress-test your deal. Protect your downside.
Those habits don’t just keep you out of trouble — they make you the kind of business owner who can do big things safely.