Perspective on 1st time searcher acquiring a biz with lawsuit?

searcher profile

February 21, 2025

by a searcher in Washington, DC, USA

Hi All
I am a first time searcher, I have come across an okay business that is 5/10 as a business, in my industry of focus. They have a lawsuit against them. Apart from the fact that the contents of the lawsuit raise questions on the culture of the company, should a lawsuit be an automatic cause of rejection for a first time acquirer?

Seeking perspective.

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commentor profile
Reply by a searcher
from The University of Chicago in Nashville, TN, USA
If it is a stock deal, run. If it is an asset deal, still run. You described it yourself as a 5/10 business and it likely has a toxic culture, move on. The lawsuit is like seeing a cockroach, there are probably more.
commentor profile
Reply by a searcher
from Pace University in Seattle, WA, USA
Not sure you want to proceed further if there is a lawsuit
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