Events over the years have proven the truth of the adage: Look before you leap. Hasty acquisitions of major companies that proved financial disasters, CEOs later found not have a claimed education pedigree, a federal agency unable to find a huge fraud, major investments based solely upon mistaken (or self-interested) third-party evaluations by rating agencies, financial officers later found to have an undisclosed criminal background, and countless others.
The common thread is a failure to perform sufficient due diligence. In our experience as attorneys, the major contributing factors are haste to consummate a transaction, the assumption that a superficial examination is “enough,” and/or a reluctance to undertake the effort and expense of reasonable due diligence.