Despite disturbing discoveries during due diligence, Mattel acquired The Learning Company (TLC), a leading developer of software for toys, in a stock-for-stock transaction valued at $3.5 billion on May 13, 1999. Mattel had determined that TLC's receivables were overstated, a $50 million licensing deal had been prematurely put on the balance sheet, and that TLC's brands were becoming outdated. TLC also had substantially exaggerated the amount of money put into research and development for new software products. Nevertheless, driven by the appeal of rapidly becoming a big player in the children's software market, Mattel closed on the transaction aware that TLC's cash flows were overstated. After restructuring charges associated with the acquisition, Mattel's consolidated 1999 net loss was $82.4 million on sales of $5.5 billion. Mattel's stock fell by more than 35 percent during 1999 to end the year at about $14 per share. What could Mattel have done to better protect its interests? Be specific.