Due diligence in civil litigation (also known as due care) is the effort made by an ordinarily prudent or reasonable party to avoid harm to another party. Failure to make this effort may be considered negligence.
This is from the Wikipedia entry on due diligence. When newsagents saw the wholehearted endorsement of the ANF of Bill Express in the cover story of National Newsagent, the national magazine for newsagents published by the ANF, they reasonably expected that due diligence had been done on the offer being recommended to them.
Not once in the seven pages devoted to Bill Express in the May 2003 issue of National Newsagent were the commercial terms between the ANF and Bill Express disclosed. Nor in the two pages about Bill Express in National Newsagent in the June, July and August issues.
Talking to newsagents today about the ANF promotion of Bill Express, many say they understood the Bill Express offer to have been thoroughly researched by the ANF on behalf of newsagents. They thought the ANF had checked the complete offer to ensure it would not be harmful for newsagents.
I doubt that appropriate due diligence was undertaken. I have certainly not found any evidence of due diligence beyond questions about the agreement between the ANF and Bill Express.
This question of due diligence is important if newsagents are to get to resolution of the expensive mess left by the collapse of Bill Express. We know from documentation in the pblic domain that newsagent exposure is somewhere between $15 million and $20 million. For small family run businesses to be left with such debt from an offer brokered and promoted by an industry association for their own profit is unprecedented.
The problems newsagents have with the Bill Express related contracts today would have been exposed by thorough due diligence in 2003. The ANF could have easily made their agreement on commercial terms with Bill, Express contingent upon an acceptable and fair legal framework being approved for newsagents. From what I understand this requirement was not put by the Newsagents’ Association.
This is why newsagents are angry at the role of the ANF in the matter of Bill Express.
Whilst I agree 100% with the issues put forward in this article/ blog the fact remains that there were many misrepresentations exercised by Bill Express during the original sales process.
The major misrepresentation of the marketing subsidy offsetting the lease and the fact that we would be in a neutral $$$ position at worst, before commissions were paid, should also form a large part of our “class action defense”.
The ANF did nothing for newsagents. This is why I am resigning from the body. They do not deserve my money.
It is also quite obvious that TBI/BX/Mobius did not down the path of a Due Diligence in the Transfer/Sale of the leases. If they did, the integrity, or lack of, those involved needs to be disclosed.
I was part of a Due Diligence Excercise during the sale of the then PTC to private companies during 1999 and 2000, it was the role of all persons involved to highlight the pluses and minus’s for both parties to each party via the report given. It was the State Governements instruction that at the end of the day there was to no surprises for either party