[Archived] Due diligence

[darrenrover]

If all the rumours of potential impropriety are to be believed, whether or not in innocence or ignorance, then the worry of due diligence investigations that would form part of a sale process are bound to be of concern to Venkys.

Should this be a stumbling block in the decision making process whether to sell or not to sell, I wonder how they could make an honourable exit.

Any ideas............?

[Roversider]

If all the rumours of potential impropriety are to be believed, whether or not in innocence or ignorance, then the worry of due diligence investigations that would form part of a sale process are bound to be of concern to Venkys.

Should this be a stumbling block in the decision making process whether to sell or not to sell, I wonder how they could make an honourable exit.

Any ideas............?

A Due Diligence audit is part of any corporate sale, it's the same as a survey on a house before you buy. It is intended to ensure that the company accounts are accurate, particularly in respect of assets and liabilities. If there is anything sensitive that the Vendor does not want the Purchaser to make public then that is normally covered by a Non Disclosure Agreement. That is normal practice and will mean that any Purchaser is likely to have elements of the Vendors business which cannot be made public. You'll just have to accept that some of the information will remain out of sight unless a Purchaser is happy to be sued by the Vendor. The only time that things could come out is if the company goes into Administration and there is no NDA in that position, any Administrator will make a call based on how any information release may or may not damage their duty to recover as much as they can for the creditors.

By the way, the NDA clauses would equally apply to BRSIT and any of their officers.

So it shouldn't be a stumbling block in respect of anything a Vendor wants to keep private. Whether Venkys would be confident that a Purchaser will comply iwould still be their call but they would have clear legal redress against anyone who breached an agreement, BRSIT officers would potentially be personally liable.