Not every business transaction goes according to plan. The target organization may focus on different goals than you had intended or, if looking at a merger, the two cultures may not mesh. Whatever the reason for the flop, a deal that turns sour can be more than just frustrating. It can grow into a problem that you need to address.
It is important to note that the results vary depending on the details, but two common possibilities used by business leaders in these types of situations include the following.
#1: Get out of the deal
If possible, business leaders note that it may be a good idea to cut ties and move on. Depending on the details of the arrangement, this could come at a financial cost. It is important to carefully review the paperwork and discuss the implications of this move with a legal professional before going forward.
In some cases, we may need to choose to learn from the mistake and focus on other endeavors.
In some cases, litigation is warranted. In a recent example, Teladoc is subject to a lawsuit initiated by investors who claim the business provided misleading information about future prospects. The lawsuit notes that this faulty information led to significant losses and damages and is attempting to hold the business accountable for these losses — losses that are reportedly well over $6 billion.
The adage about an ounce of prevention being worth a pound of cure holds true in these types of deals. Those who are looking to move forward with a healthcare merger and acquisition deal are wise to do thorough due diligence to mitigate the risk of a need to choose one of the following routes discussed above.
Attorney John Rivas is responsible for this communication