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International investigations key part of cross-border deals

By Staff

International investigations can form part of a company’s due diligence in cross-border deals, says Jim Downs, founding partner and managing director of MKD International Inc.

MKD, the only firm of its size in Canada comprised entirely of former police officers, is often called in by Canadian legal counsel acting on behalf of international companies already operating in Canada and the U.S. or thinking of expanding their operations to North America via a merger, Downs tells

As part of due diligence in a merger or transaction, he says companies interested in making a purchase will want to look into the backgrounds of the people they are going into business with.

“Basically, they want to be sure there are no skeletons in the closet of a person or company that could affect them going forward after they have signed the deal,” Downs explains.

His firm will conduct a series of checks, including address and criminal record checks, among many others.

“You’re confirming associations and looking for anything in their history that might be a red flag to the client with respect to its merger,” Downs says. “Whereas Canada has one Criminal Code, things are a little different in the U.S., because there are several levels you need to look into. You can even get down to minor misdemeanours at the county level.

“Knowing where the individual stems from is very important, and how deep the client wants to go,” he adds.

MKD calls on its networks south of the border to investigate U.S.-based individuals and corporations. It is also retained to assist in locating and serving people who are part of a lawsuit.

“Some people can prove quite evasive once a lawsuit has been issued, so we are called in to track them down and serve them with documents,” Downs says. “Those situations can also involve surveillance if it’s necessary.”

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