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ICM Case Studies

The following case studies are selected from actual client engagements. Names and circumstances have been omitted or changed, except for publicly disclosed matters, to protect the identity of our clients and the confidentiality of our engagements.
Pre-Transaction Intelligence 

A U.S. media conglomerate was considering bidding for a privatized Latin American TV license, which required a joint venture with a local partner.  We first determined that the potential partner was free of drug, money laundering and other unsavory issues which would be unpalatable to our client.  We then gathered intelligence about the identity and resources of the other bidders and their local partners.  When our inquires into the local country government indicated that the final privatization rules were likely to favor another bidder, our client withdrew.

Intellectual Property Intelligence 

A leading high-the company had developed a process for manufacturing its product which allowed it to dominate the market, produce a high quality product while pricing the product considerably below its closest competitors.  For these reasons, the manufacturing process was viewed as a distinct source of competitive advantage.  Company management had reason to believe that certain Asian competitors might be infringing one or more of the company’s patents in their manufacturing process.  We gathered intelligence on the competitors’ manufacturing processes, focusing on those areas of suspected infringement, and were able to document instances in which the competitors’ manufacturing processes employed the company’s patented technology.  Armed with this intelligence, our client was able to negotiate advantageous licensing agreements with the competitors. 

Litigation Intelligence and Support

A fortune 50 conglomerate, based in the Southeast, noticed damaging rumors about the company appearing on Internet message boards.  When rumors were picked up by a financial cable channel, the company’s stock dropped precipitously.  Because the rumors were exaggerations of confidential information within the company, we investigated employees with a grudge against the company.  Through a number of investigative techniques, we traced the Internet messages to a recently terminated employee.  We subsequently uncovered links between the employee and a well0known short seller who had recently issued a negative report about the company.  Our law firm client was then able to file various actions, blocking the employee from further message board postings and alleging securities violations by the employee and the short seller. 

Corporate Contests and Hostile Takeover Defense

A mid-western based marketing and distribution company launched an all-cash tender offer against a competitor.  We obtained intelligence that the offer was being championed by the “new generation” of management, with only lukewarm support by the company’s founders.  We learned that the founders were heavily involved in attempting to obtain a professional sports franchise, and would not tolerate negative publicity.  Our investigation into the company, its directors and its management, uncovered an equity interest by a senior executive in a trucking company that being investigated for RICO violations.  An article about this finding appeared on the front page of the Wall Street Journal.  Two days later, the company withdrew its offer.

Energy – Don’t Practice What You Preach

In-house counsel for a public company in Missouri received an anonymous letter alleging that procurement and other policies set by the CEO of a subsidiary, which operated a nuclear power plant were privately overridden by him and his team.  Counsel recruited forensic accountants to assist him with determining the merits of the letter.  Interviews with the CEO and management team elicited strong statements that they conducted business by strictly adhering to policy, especially because they operate a nuclear power plant where there was no room for compromise.  However, interviews with employees painted a picture more consistent with the issues raised in the anonymous letter.  Their obvious frustration, supported by financial information, included an apparent violation of the procurement policy, which pointed to providing business to what appeared to be favored vendors.  The most favored vendor, who had recently hired the son of the CEO, was contacted and initially agreed to cooperate fully.  However, he did not appear at the scheduled meeting, and the CEO and his management team were released. 

Construction – Shopping Mall

A $140 million, newly constructed suburban mall was plagued by $30 million in cost overruns.  Forensic accountants, working with technical experts, examined change orders and accompanying supporting documentation.  The review resulted in a reduction in claims of approximately $10 million. 

Financial Fraud Investigation

The European subsidiary of a US-based professional services firm learned that its administrative officer was conspiring with a parcel delivery vendor to charge the company for overnight delivery even when rush delivery was not required.  Our investigation determined that no other company employees were involved in the fraud, but that senior management was inexcusably lax and that controls were weak or non-existent.  We discovered that the fraud had been going on for eight years and that the company’s resultant loss was some $5 million.  We reconstructed all the transactions to support the company’s claim under its fidelity insurance policy.  

Office Complex

During the construction of a $50 million twin eight-story office complex for a leading banking institution, forensic accountants monitored the project for integrity lapses.  They reviewed bid documents, progress billings, change orders, etc. and conducted site inspections.  These activities revealed significant overcharges related to duplicate billings, material substitutions and inflated payroll charges.  Numerous recommendations were made to improve the client’s construction oversight process. 

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