A buyer thought they were purchasing a company, only to find the entity wasn't properly formed as an LLC. The speaker calls this "perfect luck" for underwriters: discovering critical flaws in incomplete disclosures only after the deal is underway.
Are you in the deal room? You know, perfect luck would be like thinking that what you're underwriting is, is— so there's got to be a clean disclosure. So like if you didn't get a clean disclosure and then they disclose something and you're like, like the thing in Wenden when they were like, oh yeah, by the way, we're selling you a company, but we have no company to sell you, right? It was like, wait a minute, your shit's not in an LLC. That's perfect luck, right? We're like, oh cool. So Now what do we do? Right. And then boom, what we've done is we've ended up in a perfect look underwriting situation. We had a bad, a bad disclosure.
