What is an Asset Search and How Can it Benefit Me?
Asset investigations aid in determining the existence of assets that will be helpful in determining the value of a company or individual. Public record asset searches are the best way to begin determining the wealth or existence of assets (and liabilities) of a person or company. A basic financial profile can be created simply from a review of properties, automobiles, liens and other tangible items held in the person or company’s name.
Assets can exist in many forms, sometimes making them difficult to locate. Open assets are easily found through public record searches, while intangible assets do not exist in physical form, sometimes creating a challenge when determining value. Hidden assets are typically created intentionally to disguise wealth and can be hard to find due to government financial protection laws. There are several reasons why performing public record searches for these assets is beneficial both for entities and individuals:
Pre-Assessment Prior to Filing a Lawsuit
When filing a lawsuit against a party for unpaid services, it is wise to locate the party’s assets to determine their worth. If search results indicate the party does not own anything of value or has drained funds used to operate the company, it will be difficult to collect unpaid debts. Researching a party’s assets beforehand will help determine if filing a lawsuit is a worthwhile endeavor or potentially a lost cause.
Locating a Funding Party or Investor
Asset searches can help identify true owners of a company as well as any silent partners within that company or investors funding projects conducted by the company. Silent partners can consist of top investors in the company, hedge fund investors, private monies from foreign investors and even family members.
Locating Past Ownership and History
When purchasing property, an asset search of prior ownership and the property’s history will indicate any existing liens against the property, which can help to ensure the purchase does not involve bad debts. Asset searches can also be conducted on products, which can help locate manufacturers, especially if a failed product has a pending lawsuit.
Employment
Pre-screenings of employees in upper management for large companies sometimes involve asset searches. Companies placing large financial responsibilities on a new employee will want to ensure that employee is financially stable and secure, which can be determined by reviewing a person’s financial history. Credit reports will indicate trouble – bankruptcies, collection agency debts, default notices and late payments to vendors.
Investment Opportunities
If two entities are considering entering into a business relationship, understanding the strengths of each company is important. Researching a company’s financial performance can be done by way of services such as Experian and Dun & Bradstreet, which report corporate financial ratios. Using their expertise, these services indicate a company’s financial strengths and weaknesses based on annual sales, reported revenues, payment history to vendors and risk within the overall industry in which the company operates.
Performing an asset search can be beneficial in determining the wealth of a party, however, it should be noted that there are restrictions facing the investigator conducting the search. The Fair Credit Reporting Act aids in the fairness, accuracy and privacy of information filed by consumer reporting agencies and regulates the collection of credit information and access to credit reports, bank accounts and other financial reports without first having permission from the party under investigation. In turn, the Gramm-Leach-Bliley Act controls how financial institutions handle the private information of individuals by way of how it is disclosed (The Financial Privacy Rule), how security programs protect the information (The Safeguards Rule) and how to prevent access under false pretenses.
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Christina Giorgio T (201) 265 2800 [email protected]
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