Reply To: Contingent Liabilities Due Diligence


Gautam Anumukonda

We can request a representation from the targets attorneys asking them to provide a description of all material litigation, claims, and assessments (excluding unasserted claims and assessments). The description should include (1) the nature of the litigation, claim or assessment; (2) the progress of the matter to date; (3) how management is responding or intends to respond to the litigation, e.g., to contest the matter vigorously or to seek an out-of-court settlement, and (4) an evaluation of the likelihood of an unfavorable outcome and an estimate, if one can be made, of the amount or range of potential loss. We should request them to express an upper limit on possible and probable loss, if possible. We should also ask them to provide representation of any unasserted possible claims that are probable of assertion.

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