We are in the 11th hour of purchasing a small business. Throughout the due diligence process the seller has been hyper-paranoid about his employees (whom are in their 60s and 70s) catching wind of the sale, so we have had to access the property only after business hours. Even after the Purchase Agreement has been signed he is STILL very squirrely about his employees finding out. (1) is this normal? (2) any obvious red flags?
Note: seller is hands-off and remote. Employees operate the day-to-day.
From my understanding it is normal. What if you backed out and the employees found out that their owner wants to sell? What if they get paranoid about how things will change before they meet you? What if they tell all of the customers? What if they leave and steal the customers before the closing?
They will find out when the deal is closed.
What if they do all those things after the deal is closed?
Well as part of due diligence employment contracts should have been reviewed.
When the deal is closed is too late. Interviewing employees is an important part of the due diligence process