Legal Due Diligence: Protecting Your Business’s Value

About the Episode

The price stated in a letter of intent is not guaranteed. Once due diligence begins, unresolved legal and operational risks can reduce the purchase price, create holdbacks, delay closing, or end the deal.

M&A attorneys Gwen Griggs and Whitney Harper explain how sellers can prepare for legal due diligence before going to market. They discuss the risks buyers examine, including entity records, contracts, intellectual property, workforce classification, insurance, ERISA matters, and successor liability. They also explain how an organized data room and an early risk review can protect value, reduce deal fatigue, and make the transaction easier to negotiate.

What You’ll Learn

• Why legal and operational problems discovered after the LOI can lead to a lower price, a holdback, or a failed deal
• Why an asset sale does not eliminate every liability concern for a buyer
• How missing corporate records, assignment restrictions, ownership gaps, and compliance issues affect buyer confidence
• Why intellectual property assignments and trademark rights should be confirmed before diligence begins
• How technology and AI can help organize and review large volumes of data-room documents
• How early preparation can reduce legal fees, shorten diligence, and preserve negotiating leverage

Risks Buyers Examine

• Corporate structure, ownership records, governing documents, and capitalization tables
• Customer, vendor, and other material contracts, including assignment and exclusivity provisions
• Trademark rights, copyrights, inventions, and intellectual property assignments
• Employee and independent-contractor classification, handbooks, and employment-law compliance
• Insurance coverage, claims, settlements, ERISA exposure, and other regulatory matters
• Liabilities that may follow transferred assets or create successor-liability concerns

How the Deal-Readiness Process Works

1. Begin with a detailed discussion of the business, its structure, operations, customers, suppliers, workforce, and plans.
2. Provide a due diligence request list and a secure data room for the company’s documents.
3. Review, organize, and analyze the records from a buyer’s perspective.
4. Create an inventory of the data room and a prioritized list of risks, gaps, and recommended fixes.
5. Work with the company’s existing counsel to address legal issues and keep the data room current.

Topics Covered

Want More? Related Resources:

• The Deal ADVantage
• ADVOS Legal
• Gwen Griggs on LinkedIn
• Whitney Harper on LinkedIn

This episode provides general information only and does not constitute legal, tax, accounting, or other professional advice. The guests’ views are their own and do not necessarily reflect the views of Morgan & Westfield.

Meet Our Guest

Gwen Griggs and Whitney Harper

Co-Founders, The Deal ADVantage and ADVOS Legal

Gwen Griggs and Whitney Harper are co-founders of The Deal ADVantage and ADVOS Legal. Gwen has more than 25 years of M&A experience. She has worked in Big Law, served as in-house counsel, and advised on buyer-side and seller-side transactions. Whitney began her career in employment law and commercial litigation before joining a private equity-backed company. Her M&A experience includes a $248 million transaction and buy-side acquisitions ranging from $1 million to $25 million.

LinkedIn: https://www.linkedin.com/in/gwengriggs/

Website: https://thedealadvantage.com/