In a newly released article from Lexpert News titled, Deal or no deal: The importance of private equity due diligence, MDS Partner Tatjana Obradović describes how thorough legal due diligence is an essential safeguard for private equity investors, acting as a crucial step to confirm the true value of a target company.
Tatjana describes legal due diligence as a “legal background check” meant to “look under the hood” of the target company. Its primary purpose, she states, is to verify that the value the investor believes they are acquiring is, in fact, present.
According to Tatjana, the legal investigation focuses on ensuring that the target company:
-
Is properly registered and legally permitted to operate.
-
Owns its assets without undisclosed claims or encumbrances.
-
Complies with all applicable laws and regulations.
-
Is not entangled in material litigation.
Tatjana also highlights the indispensable role of legal counsel in this process. She asserted that “lawyers know where to look and what to look for” and can interpret the findings to help clients weigh risks effectively. Involving lawyers early on brings “focus and efficiency” to the diligence process, ensuring the deal stays on track and closes successfully while minimizing the risk of post-closing disputes.
The full article is available on Lexpert News.