Client's challenge
The client had concerns that (i) certain employees of a recently acquired portfolio company ("Portco"), had defrauded the Portco group or its customers, or were otherwise guilty of misconduct; and (ii) the approach to revenue and cost recognition taken by Portco or the sellers of Portco prior to the acquisition was not compliant with the relevant accounting standards, in breach of the warranties and representations under the SPA.
What TS did to address it
We conducted a cross-departmental investigation, involving various workstreams including document review, data searches, advice on privilege, conducting interviews with employees and subcontractors, advice on leaver reclassification of certain key managers who had left the business and advice as to whether there was potential recourse for the client under the SPA. We also provided assistance with setting up an EBT for the buyback of leaver shares. We engaged a forensic accounting firm and a private investigator to assist with various aspects of the investigation. We then supported the client with a W&I claim.
Consequent benefits of working with us
We project managed the investigation, with collaboration between colleagues in our Employment, Dispute Resolution, Tax and Corporate teams and with external firms to provide a seamless service with one point of contact for the client. We gave clear advice on whether certain leavers could be reclassified as 'very bad leavers' under the terms of their equity programmes and on subsequent decisions regarding senior management of the Portco.