A large technology firm was considering entering into a channel partner relationship with a small distributor in another country. The technology company retained us to examine the background of the prospective channel partner.
During our research we learned that the proprietors of the company had shut down and started up several businesses in succession in just a few years. Why? Because they were consistently being sued by previous suppliers for violating the terms of their distribution agreements, particularly with respect to supply chain integrity and failing to make payments on the products they were reselling.