Information as Currency - Why a Seller Short-changes Due Diligence at its own Peril. George P. Shenas, Esq. hosts Marcus H. Klebe, Esq., Attorney with George P. Shenas, Incorporated. George asks Marcus about the importance of due diligence in M&A transactions, and Marcus begins by defining due diligence and then explaining how undertaking a systematic review of ones own enterprise gives a seller leverage during subsequent negotiations. Marcus and George encourage the full and honest disclosure of facts, even unfavorable ones, as part of the process the key is placing all facts in their proper context, and painting a comprehensive picture of the enterprise that will hold up under close scrutiny and yet secure the highest possible purchase price. Marcus emphasizes the need to maintain the buyers confidence throughout the due diligence process, because trust is an essential component to speedy and mutually-favorable negotiations. George and Marcus agree that any financial or other projections relayed by the seller at the outset of the M&A negotiations must be met, or preferably exceeded, during the weeks and months leading up to closing in order to avoid the risk of significant price erosion.
