M&A horror stories: the questions to raise before a client sells

A founder lost confidence in a buyer near the end of a transaction. A company’s project estimates could not support the earnings expected in a sale. Another deal stopped when an environmental problem emerged and nobody could establish its extent.

These were among the accounts shared at the M&A Club’s October 21 Horror Stories event. Participants discussed failed transactions, a paused process and difficulties that continued after closing. Names and identifying details are omitted here under the host’s stated Chatham House conditions.

An owner’s decision to sell can arrive well before the business, the family and the owner have worked through the consequences. For accountants, lawyers and other advisors, the discussion showed why the preparation conversation needs to reach beyond an intended price.

A decision to sell leaves personal questions open

One buyer described a founder who withdrew support after negotiations over contingent payments and legal terms. The buyer also thought the founder had become uncomfortable with management’s growing relationship with the prospective owners.

The founder’s own explanation was not available. The discussion that followed explored issues advisors can raise without presuming to know a client’s motives: willingness to give up control, expectations for family members, and what the owner intends to do after the transition.

A client may be able to describe the price they want and have little to say about the role they would accept afterwards. That gap deserves a conversation while there is time to consider the answer.

Changed payment terms can also change what the owner can use personally and when. Before a client relies on the proposed proceeds, connect the timing and conditions with their income needs, other resources and commitments.

Confidence in the team needs evidence behind it

A sell-side advisor described raising concerns about project accounting and recommending further work. The owner preferred to rely on the existing finance team. Buyer diligence later became a lengthy effort to reconstruct the numbers, and the process was paused.

The lesson for a referring advisor is to make a known concern specific. Identify the question, who is qualified to investigate it and what the result will allow the owner to decide. Loyalty to an existing professional relationship can coexist with an independent examination of a particular issue.

BDC’s due-diligence guidance encourages sellers to prepare their records with accounting and legal advisors before launching a process.

Uncertainty can prevent agreement on a remedy

An advisor contrasted an environmental problem that stopped a sale with a later problem that could be assessed and addressed through a negotiated holdback. These were different transactions, and neither establishes a general solution for environmental risk.

They show why a referral can be useful before there is an urgent closing date. The owner needs someone qualified to establish what is known, what remains uncertain and which choices depend on the answer.

The handover needs people responsible for it

An integration specialist described customers delaying decisions and employees preparing to leave after a merger. Another contribution highlighted extra work and informal arrangements sustained by loyalty to a founder.

Those accounts bring the conversation back to the continuing business. Who will manage the relationships? Which commitments depend on the owner? What has the buyer assumed the team will continue doing?

Questions for the next client conversation

Ask your client: if a buyer called next month, which part of the decision would you still need time to work through?

Choose one unresolved item and, with the client’s agreement, identify who will examine it and when you will review the answer. Use that finding to revisit the owner’s timetable, expected resources or willingness to proceed.

Based on anonymized accounts shared at the M&A Club’s October 21, 2026 Horror Stories event. Participants’ recollections have not been independently verified. The examples reflect the event discussion, not the team’s client engagements. BDC provides separate general preparation guidance.