Finding what is actually there, and saying what it means for the price and the paperwork.
Historic exposures generally travel with the entity. What is not identified before completion becomes the buyer's problem, usually without recourse.
A report listing risks without likelihood, magnitude or a recommended contractual response gives the person negotiating nothing to negotiate with.
Exposures found by the buyer's advisors mid-transaction become price adjustments at the least convenient moment. The same exposures found by your own advisors beforehand can be corrected, provided for, or disclosed on your terms.
What is being acquired, what will travel with it, and what depth the timetable actually allows, agreed in writing before work starts.
Filing history, assessments, correspondence, open matters, and the positions taken that have not yet been examined by anyone.
Each finding assessed for magnitude and likelihood rather than reported as an undifferentiated risk.
Every finding converted into a recommended action: a price adjustment, a warranty, an indemnity, a condition, or a decision to accept it.
“The filing history is clean, so the position is clean.”
A clean history may mean an aggressive position was taken and has not yet been examined, or that something was never filed at all, in which case there is nothing on record to find.
“We are selling, so diligence is the buyer's job.”
Exposures found by the buyer's advisors mid-transaction become price adjustments at the worst moment. The same exposures found by your own advisors first can be corrected, provided for, or disclosed on your terms.
“Warranties will cover anything we missed.”
Only to the extent they are drafted to, survive long enough, and are backed by someone still able to pay. A warranty is a fallback, not a substitute for finding the issue.
A due diligence report earns its value in the translation, not the discovery. Findings expressed as risk without quantification, without likelihood, and without a recommended contractual response are of limited use to the person who has to decide whether to proceed and at what price. Every finding we report is accompanied by what we think should be done about it.
The exposures that matter most are usually the ones with no paper trail. An entity with a clean filing history may simply have taken an aggressive position that has not yet been examined. Reading what was filed is the beginning of the work. Understanding what was not filed, what position was taken and whether it would survive scrutiny is the substance of it.
Sell-side review is materially undervalued. Exposures found by your own advisors, in advance, can be corrected, provided for or disclosed on your terms. The same exposures found by the buyer's advisors during the transaction become price adjustments and negotiating leverage at the least convenient moment.
The most valuable finding in a due diligence exercise is frequently the absence of something. A target with an unblemished filing history may simply have taken an aggressive position that has never been examined, or may have failed to file something it should have filed, in which case there is nothing on record to find. Reading what was submitted is the straightforward half of the work. Determining what was not submitted, what position was taken and whether it would survive scrutiny requires reading the business rather than the file.
Compressed timetables are the norm rather than the exception, and they change what a review can honestly claim. Where the timetable does not permit full coverage, the correct response is to state plainly which areas were examined, which were sampled and which were not reached, and to let the buyer decide how to price that. A report that reads as comprehensive when it was not is worse than no report, because it removes the caution the buyer would otherwise have applied.
Every Private Client engagement opens the same way: a fixed fee review of your current position, delivered as a written memorandum with risks and opportunities ranked and a recommended path. No open ended discovery.
