Locked-Box Leakage Diligence Director

The mandate

The transaction uses a locked-box date six months before expected completion, and the seller has continued group services, inventory transfers and debt settlement across the perimeter. Management bonuses and a planned dividend may qualify differently under draft definitions. The buyer needs a source-based leakage mechanism before signing, not a post-close dispute built on incomplete related-party visibility.

The eight-week deliverable comprises a transaction-flow population, permitted-leakage schedule, value-at-risk analysis and monitoring protocol. Milestone one closes accounts and related-party mapping in week two; milestone two reconstructs flows through week four; milestone three tests draft definitions and completion scenarios in week six; milestone four delivers quantified protections and executable monitoring artefacts.

The client will provide bank data, ledgers, intercompany accounts, payroll and bonus records, debt movements, inventory transfers, tax payments, distributions and counsel’s draft definitions. Acceptance requires all material movements from the locked-box date to reconcile by beneficiary and purpose, exceptions to link to draft treatment, and client finance to refresh the population. Deal finance and counsel jointly acknowledge the ledger.

The project excludes legal interpretation, drafting the purchase agreement, tax opinion, fraud investigation, final price negotiation and monitoring after completion. Consultants may identify ambiguous transactions and quantify competing outcomes but cannot classify an item conclusively without counsel. Data requests and management interviews follow authorised buyer protocols.

Editable outputs will retain source, counterparty, date, purpose, accounting location, cash consequence and potential definition for each movement. Buyer staff must process a late transaction batch and reproduce one disputed case before acceptance. Post-signing covenant monitoring or claim support is separately commissioned. The final committee memorandum will identify both unquantified exposure and the precise access limitation preventing reliable measurement.

Why this is external work

Seller teams operate ordinary group flows, deal sponsors face signing pressure and counsel needs a complete fact population before applying definitions. The buyer lacks resources to reconstruct six months of multi-system movement quickly. Independent transaction analytics can surface economic leakage without deciding contractual interpretation.

What you will own

• Reconcile cash, intercompany, payroll, inventory, debt, tax and distribution flows from the locked-box date.
• Identify direct and indirect value transfer to sellers, affiliates, executives and excluded perimeter entities.
• Separate ordinary-course, permitted, notified, consented, ambiguous and potentially prohibited movements for counsel review.
• Trace management bonuses, transaction fees, debt repayment, dividends and asset transfers to approvals and beneficiaries.
• Test inventory price, group-service charge, creditor timing and working-capital behaviour for disguised extraction.
• Quantify leakage, interest, double-count risk and purchase-price sensitivity under competing draft definitions.
• Deliver transaction ledger, source index, permitted schedule, monitoring protocol and negotiation-ready issue cases.

Candidate qualifications

• Led locked-box leakage diligence for a cross-border industrial or chemicals transaction under a long interim period.
• Reconstructed related-party and cash movements across bank, ledger, payroll, inventory and debt records.
• Distinguished economic fact from contractual classification while working tightly with transaction counsel.
• Identified indirect leakage through pricing, services, bonuses, debt settlement or altered working-capital behaviour.
• Built monitoring protocols capable of ingesting late transactions before signing and completion.
• Delivered source-linked, value-quantified cases that buyer teams used independently during agreement drafting and commercial negotiation.

Non-negotiables

• Can begin within five business days and complete two plant visits inside the eight-week schedule.
• Will disclose buyer, seller, affiliate, lender, adviser and competing-bidder relationships.
• Brings locked-box leakage reconstruction across related parties; generic working-capital diligence is insufficient.
• Accepts counsel’s classification authority and no role in legal drafting, negotiation or final purchase price.

1. 49 words maximum. Describe indirect locked-box leakage you found outside dividends or obvious shareholder payments.
2. 49 words maximum. Which source systems must reconcile before counsel can classify a related-party movement?
3. 49 words maximum. Identify any seller, affiliate or adviser relationship that could impair your independence.