Due Diligence for Business Transactions

It takes tough, strategic decisions to succeed in today’s competitive economy. As business law experts, we know that the best outcomes stem from accurate and verifiable data. This is where due diligence comes in. And Cleveland business attorney, Nicholas DeBaltzo, Jr. and his team are prepared to handle this for each and every client.

What Is Legal Due Diligence?

Put simply, legal due diligence is the formal, investigatory process that we do on behalf of our clients when they are considering entering into a business deal with another company. We dig into the assets or entities involved, giving all parties the opportunity for evaluation prior to a business transaction.

This deep dive is key before entering into a merger or acquisition, licensing deal, investing opportunity, or any other major business contract. From a business contract law perspective, the goal is twofold: 1) ensure that the deal will be beneficial to our client, and 2) uncover details or liabilities that aren’t clear from the outset. The information gathered generally comes from publicly accessible sources, business reports, and sometimes directly from the company in question.

Due diligence research typically targets an array of information, such as:

• Debts
• Legal liabilities
• Leases
• Warranties
• Long-term agreements
• Contracts
• Distribution agreements
• Compensation
• Financial performance
• Tax liabilities
• Assets and inventory
• Management and employees
• Regulations and compliance

As part of a comprehensive due diligence exploration, key documents will be reviewed.

• Organizational Documents: Certificate of incorporation, company by-laws, limited liability agreement, stockholder agreement, etc.
• Contracts: Customer contracts, supply contracts, operating contracts, licenses, etc.
• Merger and Acquisition Agreements: provisions for a potential merger or acquisition
• Finance Documents: Loan agreements, hedging agreements, guarantees, promissory notes, etc.

When research is completed, our client will have a clear idea of the company’s current and projected value. At times our careful scrutiny will reveal deficiencies in the company’s internal workings. The facts we gather will then help our client to decide whether they want to proceed with executing a letter of intent.

When Is Due Diligence Necessary?

Every business deal is unique and has its own set of circumstances. And every client will want and need to know more or less than another. From entering into a supplier agreement to spending millions on an acquisition, varying situations will require different levels of investigation. But we firmly believe that a level of due diligence is vital to most any business relationship. A thorough investigation uncovers risk exposure and allows us to offer balanced and informed legal advice.

Regardless of the situation, being well informed is the best position to start from. And this can work both ways. If our client is looking to sell their company, they’ll also want to know the true worth of their business – due diligence can accomplish that. Cleveland business attorney, Mr. DeBaltzo, has extensive knowledge of Ohio contract law and he and his team will do the needed research to best help clients.

DeBaltzo Law Firm and Due Diligence

We always want our clients to have sure footing before they enter into any business deal. Mr. DeBaltzo is a top Cleveland business attorney and along with his skilled team he is dedicated to helping clients navigate Ohio contract law and corporate law, regardless of complexity.

A thorough investigation will help you to confirm deal value and determine your next steps. We are happy to do the heavy lifting, reviewing any and all corporate documents and previewing information that you intend to disclose. The nature of the deal and the size of the company in question will play a role in the total length of the investigation, which can range from a few days to several months. But this is time well spent, and it can save you from disaster if hidden risks are revealed.

At DeBaltzo Law Firm we understand the push-and-pull nature of business transactions, and we only want what’s best for our clients. So we pair thoroughness with efficiency, taking your timeline into account when executing an investigation. We’ll never compromise the quality of our research – we spend time on what truly matters for our clients’ success.