The Conflict Clause That Almost Cost Millions: How AI Protected a Buyout Before It Closed
Where Lawyers and Spreadsheets Diverge: How AI Found What Humans Missed | Case Study
Industry: Private Equity | Region: Global | Use Case: What is hiding behind intricate clauses in the operating agreement?
In the final phase of a strategic buyout, a Private Equity firm had nearly completed due diligence on a specialised manufacturing business. The numbers checked out, the projections were solid, and legal counsel had reviewed the deal terms. But something didn’t feel right. With thousands of pages spread across operating agreements, audit reports, and loan covenants, the investment team feared a misalignment could be buried deep in the fine print.
The legal and financial documents were reviewed in parallel but in silos—leading to a fragmented understanding of liability, control rights, and debt obligations. The firm had just days before signing. They needed a last line of defence to ensure full alignment between financial reality and legal structure. That’s when they ran everything through aiMDC.
aiMDC simultaneously ingested and analysed over 1,500 pages across multiple document types. It flagged a hidden clause in the operating agreement that conflicted with the debt covenant terms — potentially triggering a change-of-control penalty post-acquisition. The AI’s cross-referenced highlights, plain-language explanations, and pinpoint source traceability provided the team with immediate clarity—and enough leverage to renegotiate the deal and avoid a multi-million-dollar post-close liability.
Client
Environment
Objective
Detect and resolve any contradictions or hidden risks between financial and legal documentation that could expose the firm to unexpected post-close liabilities
What was done
aiMDC analyzed operating agreements, audit reports, and loan covenants concurrently, using cross-document intelligence to surface contradictions, compliance risks, and missing disclosures. Every insight was linked to its exact source paragraph, enabling fast legal and financial validation
Achievement
The firm avoided a costly post-close surprise. aiMDC identified a rarely noticed clause that would have allowed lenders to call in debt upon change of ownership—conflicting directly with assumptions in the deal model. Thanks to aiMDC’s cross-referencing capability and transparent traceability, the issue was caught just in time. The firm renegotiated loan terms, adjusted deal structure, and avoided a $12M liability exposure that could have derailed integration and profitability. Beyond saving the deal, aiMDC became a core tool in the firm’s legal-financial risk review process, offering speed, confidence, and protection where traditional diligence often falls short.
What happens next…
Take control of your document challenges today. Connect with our experts, see aiMDC in action, and discover how precision AI can transform your workflow—saving you time, reducing risks, and boosting results. Ready to lead with confidence? Get started with aiMDC
‘To protect client confidentiality, certain details have been modified; this case study is intended to illustrate the capabilities of aiMDC’
