Due Diligence by Michael A. Kahn

then. Sammy grabbed it in a hostile takeover in late 1987 and changed the name to Chemitex.”
    â€œListen, Bob,” I said as I jotted down notes, “you guys do mergers and acquisitions. I’m trying to get a sense of what’s typical. Does it sound normal for a chemical engineering consultant to spend two months doing due diligence on this deal?”
    â€œWell, for some deals that might be overkill, but not for SLP.”
    â€œWhy do you say that?”
    â€œPierre Fourtou’s lieutenant is a guy named Levesque. Rene Levesque. He has final say on all the deals, and he’s supposed to be an absolute data demon. They call him the Doctor of Due Diligence. Every deal takes longer when he’s involved because of the amount of information and the level of detail he demands.”
    â€œWould a chemical engineer be competent to do due diligence on a pharmaceutical company’s files?”
    â€œA pharmacologist might be more familiar with certain aspects of the files, but someone with a chemical engineering background could handle it with the right reference materials.”
    â€œWhat kind of due diligence would he do?”
    â€œThink about it. What are a pharmaceutical company’s biggest assets? The drugs it already has on the market and the drugs that are still in the development phase. Everyone knows what drugs are on the market. In Chemitex’s case, their Hope Diamond is still Phrenom.”
    â€œThat’s theirs?”
    â€œYou bet. It’s what Douglas Armstrong founded his company on, and it’s still a popular treatment for arthritis. But everyone already knows about Phrenom. You wouldn’t need to do much due diligence on that drug beyond checking the sales numbers and evaluating the trends. The crucial due diligence is to figure out whether Chemitex has something big in the works. To do that, you have to examine the R and D files, evaluate the trade secrets, figure out what’s in the works. We did some work with McNeil Pharmaceutical last year—”
    â€œI’m sorry, Bob. Can you hold a sec?”
    â€œSure.”
    There was an odd snuffling noise coming from the other room. I listened for a moment. “Jacki?” I called.
    No response, just more snuffling. Then the sound of her blowing her nose. I set the receiver on my desk and walked to the doorway. My secretary was hunched forward, her shoulders shaking. “Jacki, what’s wrong?”
    She turned toward me. Her mascara was streaked down her cheeks and her wig was slightly askew. She shook her head in frustration as she stood up. “Look,” she sobbed, gesturing toward her leg.
    I moved close enough to spot the tiny run in her stocking. It was just below the knee, along the calf of one of her massive legs.
    â€œI’m so damn clumsy,” she said, her lips quivering. “This is the third pair of pantyhose today. The third! They cost me four dollars each.”
    â€œIt’s not so bad, Jacki,” I said gently. The poor thing looked like she was on the verge of estrogen shock.
    â€œMaybe not yet,” she moaned, waving her arms, “but just wait. In an hour it’ll be all the way down to my toes.”
    I kneeled by her leg and studied the run. I looked up with a smile. “We can stop it.”
    She gave me a puzzled look.
    â€œDo you have some clear nail polish?” I asked.
    Jacki thought for a moment and shrugged helplessly. “It’s at home.”
    â€œCheck the bathroom down the hall,” I said as I stood up. “I think I left some in the medicine cabinet.”
    She blew her nose. “What do I do with it?”
    â€œI’ll show you.” Then I remembered Bob Ginsburg. “Good grief.” I hurried back to my desk. “I’m sorry, Bob.”
    â€œWhat’s happening out there?” he asked.
    â€œMy secretary had a problem. It’s okay.”
    â€œWhat kind of problem?”
    â€œWell,