M&A: Key issues to look out for in respect of contracts entered by target companies
Instead of a full legal due diligence report which sets out salient terms of contracts entered by the target companies, some buyers prefer to have a red flag report, which only highlights legal issues. In respect of contracts entered by the target companies, a red flag report may cover the …
Three things you may miss out in legal due diligence
1. Boilerplate clauses in agreements are usually not controversial. Nothing that makes your eyes widen in surprise or your heart skips a beat. Notice provisions with the header “NOTICE” towards the end of agreements usually set out the mode of serving notice, the timeline by which notice is deemed to …
Is it possible to enjoy doing legal due diligence work?
I get a bit skeptical when interviewees or junior lawyers say they enjoy doing legal due diligence work. My first reaction would be, “Really?” Is it possible to enjoy doing legal due diligence work? The volume of documents to be reviewed, tight deadlines, amount of effort required to get complete …
Two licences to look out for in legal due diligence
“We do not require any licence for our business.” Sometimes I get the above reply in response to questions about licences held by companies which I am conducting legal due diligence on. Usually these are companies carrying on business that are outside the sectors regulated by the Malaysian government. Nonetheless, …
Legal due diligence: Spotting errors with common sense
In legal due diligence exercise, it is easy to get lost in all the details, especially when there are urgent deadlines and voluminous documents to be reviewed. Some errors in legal due diligence reports are obvious when you take a step back and apply common sense. It doesn’t make sense …
Legal due diligence: Is it high, medium or low risk?
The most difficult part of legal due diligence when I started out as a corporate lawyer was not the voluminous review of documents and preparation of reports. The most difficult part was to rate the risks relating to the issues identified during the legal due diligence exercise. Some clients or …
Spotting inconsistencies in legal due diligence
Part of legal due diligence includes spotting inconsistencies in the information provided for legal due diligence. *** For example, the representative of the target company replied that the company does not have any employee in response to questions in the due diligence questionnaire about employment. However, there is information about …
What purchasers’ legal counsel look out for in M&A due diligence on contracts
When conducting legal due diligence on contracts entered by a target company in an M&A transaction, the following are some of the provisions to look out for in the contracts: 1. Whether the counterparties may unilaterally terminate the contracts or terminate the contracts upon certain events triggered by the M&A …
Three simple ways to enhance legal due diligence skills
1. Understand the scope of legal due diligence and work backward to establish what needs to be verified or reviewed. Sometimes, clients may decide on the scope of legal due diligence. For corporate exercises which require regulators’ approvals, the scope of legal due diligence must meet the requirements under the …
Three simple ways to speed up legal due diligence
When a company undertakes a corporate exercise, the task of providing documents and information for due diligence is usually delegated to the management of the company. The following are three simple ways for the management of the company to speed up the due diligence exercise and make the process more …