Here's how it's done in the grown up world.

In a friendly acquisition such as this, when an acquirer/investor (DH) approaches the target (Pappio-Webbio,) there is quite a bit of information exchange that takes place to establish the bonafides. Pretty standard stuff in a situation like this would include:
- set of financial statements from DH (preferably audited or with a DH commitment to let Pappy's bean counters do some due diligence on the numbers he showed)
- Web activity stats from Pappy, both actual and estimated
- a business plan from Pappy alone or a collaborative one with DH
- statements exchanged by their respective lawyers with respect to any litigation, on-going or anticipated
- advertiser lists, current and prospective from Pappy
- commitments to establish an escrow fund
- industry specific stuff (that I can't think of right now)

Actually, there is really no need in the Trib article (with all due respect to PC) or a bancruptcy report. Pappster should have walked away the minute DH told him that he doesn't have financials, they are confidential, or anything to that effect.