Tough Question:

You should be able to discuss products or services, revenues, reputation, image, goals, problems, management style, people, history and philosophy. But don't act as if you know everything about the place. Let your answer show that you have taken the time to do some research, but don't overwhelm the interviewer, and make it clear that you wish to learn more.

You might start your answer in this manner: "In my job search, I've investigated a number of companies.

Yours is one of the few that interests me, for these reasons..."

Give your answer a positive tone. Don't say, "Well, everyone tells me that you're in all sorts of trouble, and that's why I'm here", even if that is why you're there.