Due diligence is the verification a buyer or lender performs before committing, checking that the assets, records and representations are what they are said to be. For legal assets it extends to the provenance and handling of the data behind any valuation.
A diligence request for a legal-asset pool covers the matters themselves, the contracts, the lien position and the servicing history. Where models are used, it also covers the model documentation, the validation results and the sealed-outcome discipline.
A data room built for diligence organizes this material so a reviewer can follow a number from the summary down to the record. Gaps and known limits are stated, because a reviewer will find them either way.
Due diligence is not a formality at the end of a negotiation. It is the process by which a claim about an asset becomes a claim the buyer has tested.
Working a file that turns on this term?
Working through a diligence process?
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