Informed due diligence is a crucial step in any transaction. No two deals are alike, and deals within the transportation space in particular demand attention to a number of niche areas. Whether the target company is involved in cross-border moves, warehousing, shipments of hazardous materials or controlled goods, brokerage, or any number of transportation and logistics operations, attorneys in the Scopelitis’ Mergers and Acquisitions Practice Area can call on experts with decades of experience to help make sure your deal and post-close operations are free of avoidable hiccups.

While the potential areas of review vary depending on the operating model and segment at play, some common areas of concern include:

1. Licensure and Change-in-Control Requirements. Permits and authorities issued by the Transportation Security Administration (TSA), Customs and Border Protection (CBP), the Federal Maritime Commission (FMC), and many state and local transport licensures can trigger regulatory filings in the event of a change in control.
2. Assignability and Licensures. While some transportation-related accounts can be effectively transferred in an asset sale, many cannot—including a seller’s USDOT number.
3. F-Reorganization. Common within an equity sale is a pre-close F-reorganization which can result in a change in entity form (typically a conversion from a corporation to an LLC). These transactions often result in a change in company name that needs to be reflected in any transportation-related accounts, licenses, permits, or certifications. However, some state regulatory agencies, for instance, do not recognize these name changes which results in the target needing to obtain a new permit.
4. USDOT Safety. Review of USDOT safety compliance is a core area in transportation diligence, regardless of whether the deal is structured as an equity or asset transaction.
5. Independent Contractor Misclassification. One area of particular focus within diligence and subject negotiation in a purchase agreement is potential independent contractor misclassification. A failure to adequately access risk in this regard (and take appropriate corrective measures, if necessary) could result in significant liability exposure down the line. 
6. Motor Carrier Tax and Vehicle Accounts. While electronic logging devices have made reporting International Fuel Tax Agreement (IFTA) taxes easier, companies are subject to audits for reports submitted through the past four years.
7. Motor Carrier Vehicle Credentialing. International Registration Plan (IRP) accounts must also be reviewed. Participating jurisdictions have varying plate renewal dates, and registrants must report fleet mileage annually.

Scopelitis has considerable experience serving as transportation counsel in support of buyers and sellers, whether a strategic acquisition or private equity investment is at issue. The Firm is uniquely positioned to provide diligence support, including in combination with a representations and warranty insurance underwriter process, and to assist with implementing post-close operational fixes.