CLIPPINGS

Every seller has undisclosed problems at the final due diligence stage. For reasons of confidentiality, information flow to the prospective purchasers has been limited up to this point, and for reasons of marketing, the seller's agent has emphasized the most attractive elements of the seller's business. As a result, a prospective buyer has been shielded from negative factors that might have deterred it from pursuing the deal. Occasionally, the buyer's final due diligence effort uncovers a golden nugget of value, but in my experience, the opposite generally occurs. Final, intensive due diligence inevitably reveals negative items that diminish the seller's value by a considerable amount. Once this becomes apparent, the would‐be buyer is left with two alternatives: (1) renegotiate the purchase price; or (2) walk away from the deal.