DDC assists public company in $750 million strategic acquisition

Due Diligence Consulting, LLC (DDC) provided research support and due diligence as part of a U.S. public company’s approximately $750 million acquisition of a private company.

Although the cost was much smaller than its typical transaction, DDC’s client felt the private company was a strategic target of opportunity and that time was of the essence in negotiating and closing the deal. DDC worked quickly with the acquirer to set research parameters and delivered its research, including background checks on key executives, in less than 2 weeks and under the client’s budget. DDC’s research enabled its client to quickly close the deal before other parties could possibly raise the cost of the acquisition.

“Our clients rely on DDC to provide them with critical qualitative information when they are making investments or acquisitions, as well as deliver research on executives when they are evaluating the risks associated with any transaction,” said Peter Barakett, President of DDC. “What we uncover may impact the deal as well as which executives are retained and which are let go.”

About Due Diligence Consulting, LLC — DDC’s clients include Fortune 500 companies, private companies, family offices, law firms, hedge funds, private equity funds, venture capital funds, foundations, and accounting firms. Founded by Peter Barakett, formerly General Counsel and COO for Atticus Capital LLC, DDC focuses on executive background checks and investment related research and provides due diligence for mergers and acquisitions, proxy contests, litigation and special situations. DDC has a global reach, with clients around the world and decades of experience in sophisticated, detailed research in the USA as well as in foreign jurisdictions. DDC has consistently discovered information that others have missed, including numerous instances of corporate and supply chain fraud, as well as CEOs, investment managers and public company board members misrepresenting their education or work experience. In addition, DDC has assisted its clients in avoiding Ponzi schemes and other fraudulent schemes. DDC Investigations LLC is a full service private investigation firm (License #A1300198) and an affiliate of Due Diligence Consulting, LLC.

Contact: Peter Barakett, President, (239) 434-8393 Email: info@DueDiligenceConsulting.com

Bauer Hockey accused of fraud, channel stuffing

Performance Sports Group, which owns the Bauer and Easton brands, has been accused of fraud and stock market manipulation stemming from channel stuffing.  Channel stuffing is more common than people think, and can occur in various forms / schemes.  We see it most often in direct to affiliated retail and distributor arrangements in clothing, home goods, and tech, but it can happen in any industry, in a myriad of ways.

Detailed and professional due diligence can often identify various forms of channel stuffing early. Channel stuffing not only affects the accounts of public companies and their stock price but is also common in the sale of a privately held business in order to inflate revenue that will be subject to a negotiated multiple the parties agree upon for valuation. One example is a law firm that asked its clients for retainers in advance of anticipated work, using the retainer amounts to inflate sales and represent to an acquirer that the retainer amounts were part of services invoiced and collected, thus inflating the price paid by the acquirer. For more info, click here.

********************************************************************

Peter Barakett

President

DDC – Due Diligence Consulting LLC

DDC Investigations LLC

Lululemon Director resigns amid bio issues

Lululemon Director Rhoda Pitcher has resigned after her bio was called into question.  Among other things, she claimed to have had a masters degree from University Associates, which could not be confirmed. You can read more from the NY Post here. RealMoney.com has a detailed article here. What’s amazing is how many times her bio was vetted or she was background checked, including presumably by Lululemon itself, without any person or firm catching any of this or thinking such a person was qualified to be on the board of a public company.

********************************************************

Peter Barakett

President

DDC – Due Diligence Consulting LLC

DDC Investigations LLC

 

Director falsifies bio

DDC’s research recently found that a director of several public companies had stated in some of his professional bios that he was a CPA when in fact he never had a CPA, nor a degree in accounting. He did have a law degree but never practiced law.

Peter Barakett, President

DDC – Due Diligence Consulting LLC

DDC Investigations LLC

CEO resume fraud

DDC recently determined that the CEO of a public company had made multiple false statements in different versions of his corporate bios as well as in regulatory filings.  In one instance, the CEO attempts to cover up a false statement by creating a new entry in one a website bio.  What is interesting is that this person is highly accomplished and there appears to be no reason to have made any of the false statements.

Peter Barakett, President

DDC – Due Diligence Consulting LLC

DDC Investigations LLC

Director arrested for domestic violence

DDC was engaged to conduct a thorough review of the directors of a company targeted by a hedge fund client.  DDC found a director was arrested for domestic violence in 2008 in a state that he was not easily connected to.  DDC believes other firms may have missed this arrest by focusing on the current and most recent jurisdictions for employment and residence, rather than all jurisdictions he has ever had a contact or connection with.

Peter Barakett, President

DDC – Due Diligence Consulting LLC

DDC Investigations LLC

Public Company Director misrepresented bio in court documents

DDC was engaged to thoroughly review a Director of a public company.  DDC found that the director misrepresented having a CPA, as well as other certifications and memberships, in substantially all associated bios, SEC filings and certain court documents. The later declarations were made under penalty of perjury.

 

Peter Barakett

DDC – Due Diligence Consulting LLC

DDC Investigations LLC

CEO lied in bio

DDC was recently engaged to conduct a thorough background check of the CEO of a US public company in connection with a legal action, after our client had engaged a competing firm that produced no actionable results.

We checked everything, everywhere he ever was.  We found an archived bio on a former employer’s website.  That old bio differed substantially from his current bio.  The old bio claimed that the CEO was licensed to practice law for a certain amount of years (at that time) and it mentioned two prominent law firms where he claimed to have practiced.

DDC found that he was not licensed to practice law anywhere in the United States for most of the time period claimed in the archived bio.  Furthermore, he was only a summer intern at one of the law firms (and thus not practicing law, as he had not yet passed any state bar exam) and did not work at the other firm.

An interesting aspect of this assignment was that this person was affiliated with several businesses over the last 20 years as an advisor, or as a friend or relative, of a principal in businesses that were found to be Ponzi schemes, or that were accused of fraudulent activity.  In each case, the CEO was not directly implicated.

Peter Barakett, President

DDC Investigations LLC

DDC – Due Diligence Consulting LLC

DUI – Sr. Executive

Last week DDC found that a senior executive of a public company had a DUI.  From our in-depth research DDC also knew that he had a minority interest in a restaurant in another state.  DDC researched the restaurant to see if they served alcohol. They did.  So DDC requested copies of the liquor license applications.  He lied on two liquor license applications as to his DUI arrest and conviction, a felony offense in that state.

Peter Barakett, President

DDC – Due Diligence Consulting LLC