Case Studies from Reilly International Group

Real Estate Partnership Proposal Due Diligence
Outcome: Organized Crime Association Disclosed; Client Declined Partnership

A Florida real estate corporation considered a partnership with a New York construction company. In this study, Reilly International Group was retained and disclosed that the construction company principal was convicted for using organized crime associates to coerce a competing contractor, and for filing false business records related to bids for New York State construction contracts. Our client declined the partnership.

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Printing Company Post-Financing Due Diligence
Outcome: Disclosed Hidden $2 Million Inventory Discrepancy; Favorable Client Re-Financing

A bank engaged a national accounting firm to conduct a due diligence of a printing company in advance of a $20 million financing. The accounting firm’s review did not uncover any problems.  Two months after the financing was placed, one of the printing facilities reported negative inventory adjustments. In this case study, Reilly International Gropu was retained and visited the facility under a cover story of evaluating year-end projections.  In this case study, Reilly International Group identified a consultant hired by the printing company prior to the financing who when questioned revealed that he informed the company of inventory discrepancies totaling $2.6 million. Client successfully renegotiated the terms of the financing.

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Public Relations Firm Due Diligence
Outcome: Uncovered History of Drug Trafficking; Client Declined Financing

A venture capital firm retained TRIG to conduct a due diligence prior to making a substantial investment in a public relations firm. Our inquiry disclosed that an officer of the public relations firm had been convicted of drug possession and check fraud and that two financial backers in the public relations firm had been convicted of drug trafficking. Client decided against financing.

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An investment group retained TRIG to conduct a due diligence of two principals in a proposed startup venture. Telephone calls to the asset management firm where the second principal was reportedly the president were unanswered. TRIG research and source interviews disclosed that a judgment against the principal for non-payment of services by a hospital specializing in substance abuse recovery treatment had never been satisfied. Client refrained from business relationship.

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A bank considered financing a radio station majority owner. TRIG learned four years prior to his loan application, subject borrowed $7 million to purchase the shares of the former majority shareholder of the same radio station. Two years later, when subject and a minority partner attempted to sell the radio station, a potential buyer declined his purchase offer when he identified four sets of books. The subject then failed to buy out the minority shareholder who filed suit against him charging he had stolen millions of dollars from the radio station.

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