Avoiding a Costly Mistake

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Avoiding a Costly Mistake

We understand that the best lawyering isn’t always about knowing the law. Sometimes it’s about knowing a client’s business and using our experience to identify the issues that could become problems — and avoid those problems before they happen.

Lisa Mueller, head of our Life Sciences group, did just that when she helped a pharmaceutical client avoid an acquisition that could have turned into a legal and financial nightmare. Our client was negotiating to acquire a start-up business that was well regarded and growing fast. But during a conference call, Lisa noticed that one of the start-up's officers provided very little detail.

Michael Best's research revealed that the start-up had been sued by that officer's previous employer for trade secret misappropriation, breach of fiduciary duty, and other causes of action. The officer had allegedly worked on activities related to the start-up while still employed by his previous company. No information about the litigation or issues with his previous employer had been disclosed to our client during due diligence.

The start-up’s leaders claimed they hadn’t disclosed the litigation (or the officer’s dual role) because they considered the matter frivolous. Nevertheless, our client decided to pull out of the transaction. Shortly thereafter, the start-up was raided by the FBI. Our client told Lisa, “Thank you for helping us avoid a costly mistake.”

Recalling the story, Lisa says it was a gut feeling that alerted her to the problem. But her intuition had plenty of help from her deep experience in the industry and her profound commitment to protecting our client’s interests. It’s this kind of seasoned, skillful counsel that sets the attorneys at Michael Best apart. Our attorneys know the law. But they also know people — and they know how to ask tough questions, even when the answers may be difficult to hear.

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