The Oklahoma Bar Journal September 2023

C orporate L aw

General Corporate Due Diligence in Mergers and Acquisitions Transactions By Tiantian Chen

I T IS COMMON KNOWLEDGE THAT LEGAL DUE DILIGENCE is a critical step in mergers and acquisitions (M&A) transactions. This article, intended as a quick reference for junior M&A attorneys tasked with the legal due diligence process, includes certain basic discussions of the most common legal diligence issues.

No attorney-client relationship is created between the reader and the author. The author expressly disclaims any liability with respect to any actions that a reader may take based on the analysis in this article. The analysis in this article is presented “as is,” and the author makes no representation that the content herein is error-free. cess frequently starts promptly or soon after the execution of an LOI, and the LOI may contemplate the expected completion date of the legal due diligence process. Failure to complete the legal due diligence within the agreed timeline could result in serious consequences, such as the expiration of the exclu sivity period agreed to between the buyer and the seller in the LOI. GENERAL Review the LOI The legal due diligence pro

required legal research; and 5) the discussions are focused on the typical legal diligence performed by the general corporate team, and it does not involve discus sions of any specialty diligence that are usually performed by specialists in applicable areas of law, e.g. , securities regulations, labor and employment, employee benefits, environmental regula tions, healthcare regulations, data privacy, intellectual property, real estate, government contracting, etc. Additionally, this article only focuses on some of the most typi cal corporate legal diligence issues and does not include exhaustive discussions of all potential legal diligence issues. The analysis and information included in this article are for gen eral informational purposes only. Nothing herein constitutes, or is intended to constitute, legal advice.

For simplicity purposes, the discussions in this article are limited as follows: 1) this article does not address the business, financial or other types of non legal diligence that may occur in connection with M&A trans actions; 2) this article focuses on the legal due diligence performed after the execution of the letter of intent (LOI) and does not include discussions of the preliminary diligence performed before an LOI; 3) the discussions are cen tered on a simple transaction with only one acquiring entity (the buyer) and one selling entity (the seller), without any lenders or financing sources, representa tions and warranties insurance providers and other third parties; 4) the discussions are further limited to the review of the due diligence files provided by the seller and do not extend to any

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

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THE OKLAHOMA BAR JOURNAL