In a contentious takeover bid, a savvy businessman bought the loan of a troubled company and started foreclosure proceedings. An ugly takeover battle between the old and new owners ensued, with the new owner eventually winning control of the company. But what he found was a company suddenly in far worse financial condition than it should have been.
Suspecting improprieties on the part of the former owners, the new owner hired David Anderson to conduct a fraud investigation of the financial records of the business during the takeover period. David discovered the departing owners had drained considerable monies from the company by improperly paying themselves “stay” bonuses and distributions, inappropriately doubling and tripling rents and fees paid to companies owned by the departing owners, and illicitly paying their own hefty personal expenses. Based on David’s findings, the new owner sued, recovering a major portion of the improperly diverted funds.