Doing Due Diligence on Prospective Partners

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq., owner of Ask The Business Lawyer, is an award-winning business attorney, speaker, and Entrepreneur Magazine online contributor. She saves consulting and professional services companies time, money, and aggravation by serving as their outsourced legal counsel.

Posted on December 15, 2013 in Business Partners

Everyone’s entitled to make a bad decision now and again.

That chartreuse designer blouse that was just a smidge (ha!) too small (sure, you’ll lose a couple of pounds to fit into it) but you bought anyway because it was on sale and now takes up valuable real estate in your closet?  Not a good decision.

The blind double-date that your pal arm-twisted you into because he wanted to go out with the hot girl who had a friend she needed to fix up, and you spent the next four hours listening to tales of cats, kitty litter, and poor Snookums with the hairball problem?  Not a good decision.

That business partner that you started the new company with, whose credentials you didn’t check too closely because she was a friend of a friend (or came with a name that had a long pedigree and supposed connections), who ended up being a total bust forcing the company to go down the toilet?  Not a good decision.

But when you choose a supposed multimillionaire who’s actually bankrupt for a business partner (Company #1), become a business partner in a company that you later learn is committing fraud (Company #2), and form a company (#3) two months after your new business partner is scheduled to stand trial on charges of alleged drugging and indecent assault on a woman at his luxury Sydney home . . . well, ya gotta ask:  “What is going on here?”

As reported in The Australian online, that’s the story of former Australian Prime Minister Bob Hawke who, it seems is facing one of several situations in his post-political business career.  I can’t figure it out.  What is he thinking?  Here are some guesses:

  • He’s independently wealthy and has money to burn on bad investments for tax reasons
  • He’s lazy
  • He’s reached his Peter Principle in business
  • He has no advisors

Due diligence, anyone?

 

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