Real-Life Decision Making
The world of mergers and acquisitions is interesting. There is constant pressure to perform at your best and to deal with people who may or may not be a good fit for your personality.
The current deal you're working on seemed pretty straightforward at the start. A local business was ready to sell, and a national chain wanted to buy them out. You went about the business of completing the sale -- doing the company valuation, making sure all of the correct financial statements were in order and arranging the meetings necessary to negotiate the deal.
It wasn't until well into the deal that you learned something disturbing. The company that is selling has been doctoring their accounting statements to show a larger profit than they are actually making. Although the paperwork is in order, it doesn't paint a clear picture of what the company is currently doing.
To make matters even more complicated, you're representing the seller. But you know bad business when you see it. And this feels like bad business.
If you don't let the buying company know that the selling company is representing itself in a less-than-accurate way, you stand to be liable if the deal goes sour. However, if you do let the buying company know about the inconsistencies, then you're betraying your loyalty to your client, and that could lead to a reputation problem.
What do you do?