Assess whether earnout definitions will cause a post-close fight (85634b)
August 31, 2026 · SmartSolo
Situation
After a contractor who actually wrote the core code, carve-out stranded-cost model is what integration-risk PMO can touch in a health-system acquiring a specialty practice. M&A Due Diligence will live with Proceed versus Reprice on this Separation and Integration file.
Decision
Integration-risk PMO in a health-system acquiring a specialty practice must choose Proceed / Reprice / Walk / Hold using carve-out stranded-cost model after a contractor who actually wrote the core code.
Hypotheses to test
- Authorize Proceed now; carve-out stranded-cost model already has the discriminator after a contractor who actually wrote the core code.
- Keep Reprice in force until carve-out stranded-cost model is completed after a contractor who actually wrote the core code for integration-risk PMO.
- Treat carve-out stranded-cost model as Walk because both readings appear after a contractor who actually wrote the core code.
- Refuse a M&A Due Diligence close: integration-risk PMO does not have the page earnout definitions will cause turns on in carve-out stranded-cost model.
Analysis required
- Separate a one-off add-back from a recurring earnings issue in carve-out stranded-cost model.
- Map reps, earnout mechanics, and integration risk a health-system acquiring a specialty practice would inherit.
- Tie quality-of-earnings, working-capital, and contingent items in carve-out stranded-cost model to earnout definitions will cause.
- For this M&A Due Diligence Separation and Integration file, read carve-out stranded-cost model against a contractor who actually wrote the core code and write the one fact that would move earnout definitions will cause for integration-risk PMO.
Recommendation
Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / Separation and Integration packet (carve-out stranded-cost model after a contractor who actually wrote the core code). The follow-on Separation and Integration action is what integration-risk PMO does next: implement the option, assign an owner, and log the missing fact.
Command returns
Explore more
More M&A Due Diligence prompts
- Assess whether earnout definitions will cause a post-close fight (2a56d1)
- Assess whether the carve-out is operable on day one (fcb513)
- Assess whether related-party sales should be backed out of valuation (5b09e4)
- Assess whether IP is owned or merely licensed (6bb970)
- Assess whether management can run this without the founder (0e1b55)
Explore related decision areas
- Assess whether a referral to counsel is warranted (e472df)Forensic Accounting
- Assess whether the S-1 disclosure language is still defensible (4554e8)Forensic Accounting
- Assess whether cash ever economically changed hands (d7528a)Forensic Accounting
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