For the closing ceremony of Hillard Heintze’s blog series celebrating the 2018 Winter Olympics, I thought it might be interesting to look at the top five countries in terms of total medals won and compare public records availability in those countries and how that availability affects our due diligence work. In case you missed it, the top five countries in medal count were: Norway (39), Germany (31), Canada (29), the United States (23) and the Netherlands (20).
Corporate clients often come to us for our pre-transaction due diligence services when evaluating an acquisition target and its management team. The primary goal is generally to identify red-flag, adverse or concerning issues during our research. Although our findings have sometimes been a deal killer, clients have also used them to inform how they structure the terms of a potential deal or to give them additional comfort about the personal and professional histories of their future business partners. We conduct this work in a number of ways, but we always start by researching public records and open source information.
Just as some countries produce athletes that tend to be stronger in certain sports than others, each country is unique in regard to what is available in its public records domain. As part of our due diligence work, we must know the ins and outs of international public records.
The U.S offers the most robust public records landscape of the five top medal-winning countries, with Germany offering the least availability of records.
Countries with the Most Restrictive Public Records Regulations
In Germany, Norway and the Netherlands (and some courts in Canada), it is impossible to search for criminal records without the individual’s signed consent. In these three countries even searching for civil litigation and lawsuits by an individual’s name is not always possible, whatever available search results aren’t comprehensive or are only searchable if we have the case title and number. In these countries, we can search to see if someone has filed for bankruptcy, has any judgments registered under his or her name, or owns a home (and possibly the purchase price and mortgage details) and to identify corporate directorships. In all of these countries we include searching and analyzing English and local language news and social media, which often provide a wealth of information.
The U.S. and Canada’s Public Records Domains
Canada is more aligned with the U.S. in terms of records availability, but the U.S. has by far the most availability of public records and open-source information. In the U.S., our due diligence work often includes a combination of searching wide networks of records including criminal, civil litigation, bankruptcy filings, judgments, tax liens, corporate records and assets. Not only can we identify the existence of a criminal or civil case, but we can also get copies of underlying court filings to understand more about a complaint or allegation. We can also see the reason someone sought an order of protection against an individual, understand more about a contract dispute, see if someone has ever been subject to a tax lien, find an undisclosed company or employment not otherwise known, learn more about debts for someone who filed for bankruptcy, research assets to see if someone is living beyond his or her means, and identify campaign contributions to see which way an individual may lean politically. That’s a lot of records.
One U.S. Exception: Business Records
One big exception to the robustness of U.S. public records compared to the other top medal-winning countries involves business records. In the U.S., regulations for corporate and business filings for private companies are determined by the state, or in some cases county, where the business is registered. While most filings in the U.S. include a registered agent, purpose of the company, officers or members of the company and principal place of business, not much more is typically required. In many of the other top-medaling countries, annual filings for businesses include more details about the company’s ownership and financial information.
While a country’s standing in the medal count obviously doesn’t have any connection to the availability of public records, the Olympic medal count seemed like a great opportunity to examine how these countries compare, not just in terms of the Olympic record book, but in terms of the public records book.