HRBN: Hehe, that margin argument came from a seeking-alpha article right? ;). I read that one too.
The ultimate comfort in this situation for me comes from the fact that the CEO got Goldman Sachs involved and the BoD got Morgan Stanley. Thats not the action of someone trying to "hide" something. Heck, if there were auditing problems i'd think the CEO would know about it... Going private also does not make much sense to me if the CEO is running a fraud.
Your right that we do not know in what capacity Deloitte was hired, but look at what Starr did before it invested in CCME. It *certainly* conducted its own independent audit, hired independent research firms to gauge future prospects, etc...And that transaction was much much smaller than this one.
I think the chance is 0% that Morgan Stanley and Goldman Sachs are not conducting their own due-diligence audit before getting involved here. A huge loan from Goldman makes it even more likely, its their money after all ;). MS will become liable to the BoD+company if it gives advice on the LBO without doing its own investigating on what the company is worth/etc.
-Fernando
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