1Prior to Filing Litigation – In preparing to file litigation against a party, the ultimate success of the case depends on whether the opposing party can pay for the damages. Prior to spending thousands of dollars in legal fees, you are better off understanding if the party has adequate assets to cover the potential damages.
2During the Course of Litigation – So you didn’t hire a private investigator to locate assets prior to filing litigation and now the opposing side is claiming poverty. A detailed asset search may confirm or deny the existence of any real assets or any hidden assets that may have been transferred to related parties.
3New Investment – One of the biggest red flags indicating an investment fraud is an investment manager living beyond his or her means. That oversized boat and expansive home may be an indication that the manager is taking an oversized “paycheck” from the proceeds due investors.
4Due Diligence – During the course of conducting a due diligence investigation on a possible acquisition, the party may have some reported assets, but do you know how much those assets are really worth or where the assets came from?
5Internal Corporate Investigations – Do you suspect that one of your employees is embezzling money or accepting kickbacks? That money has to go somewhere, and it may be going into a newly built vacation home on the beach.
6Lending Money – Prior to a financial institution or private party providing a loan, identifying assets to support the financial health of the party may be the key to recovering assets down the road if the deal goes bad.
7Divorce Proceeding – While it may not always be the case, in some instances, joint assets may have been acquired without the other party’s knowledge.
8Judgment Recovery – Getting a court-ordered judgment is the first step, but then there’s finding the party from which to collect the judgment and actually receiving the proceeds from the judgment. Those are not always so easy.
9Leverage in Negotiations – Understanding the financial health of the party you are negotiating with may ultimately mean a favorable settlement. If you know that the other party was in serious financial trouble, you may want to consider settling quickly.
10Executive Background Screening – A newly hired executive living beyond his or her means or experiencing financial difficulties may raise a significant red flag warning of potential fraud down the road. A recent study by the Association of Certified Fraud Examiners showed two key warning signs of occupational fraud are living beyond one’s means (43 percent of cases) and experiencing financial difficulties (36 percent of cases).
Your turn. What are some of the reasons that you would want to locate assets?