Resources
Understanding escrow
Guides and analyses on securing the price of your transactions: business sales, share sales, real-estate share deals and the legal framework of escrow.
34 articles
Escrow in a leveraged buy-out (LBO)
Debt-funded acquisition, holding company, senior debt and a private-equity fund: an LBO stacks competing interests. Escrow secures the price, the warranties and the closing.
Escrow at the closing of an M&A transaction
At the closing of an M&A deal, everything happens within a few hours. Escrow synchronises payment of the price and transfer of the securities, exposing neither party.
Cash collateral for warranties and indemnities (M&A)
How can the buyer be sure the seller will pay if the warranties and indemnities are called? By blocking a fraction of the price: cash collateral.
Cash collateral or escrow: what are the differences?
Blocking funds is not enough to define them: cash collateral is a security, whereas escrow is the neutral holding of funds by a third party. Two distinct logics.
How long does an escrow last?
An escrow can last a few weeks or several years. A tour of the usual durations, operation by operation, and of what determines them.
The pledge of a bank account (gage-espèces)
Earmarking the funds on an account to secure an obligation: the pledge of a bank account, or gage-espèces, offers a simple, immediately enforceable security.
The usefulness of an escrow account in a capital increase
In a cash capital increase, the subscribed funds are blocked until the transaction is completed. The role of the escrow account and the trusted third party.
KYC and anti-money-laundering (AML/CFT) in escrow by a lawyer
KYC forms part of a broader framework: anti-money-laundering and counter-terrorist-financing (AML/CFT). How it structures an escrow entrusted to a lawyer.
KYC and source of funds in an escrow: what you need to know
Entrusting funds to an escrow lawyer entails an identity and source-of-funds check. KYC, KYB, documents requested and enhanced controls: the essentials.
Escrow with a lawyer or a commissaire de justice (French judicial officer, formerly huissier): which to choose?
Both a lawyer and a commissaire de justice (French judicial officer, formerly huissier) can act as escrow agent. But for escrowing the price in a disposal or a financing, the lawyer combines advice, drafting and a CARPA account.
F.A.Q. on contractual escrow
Answers to the most frequent questions on the escrow of funds entrusted to a lawyer: CARPA, dedicated sub-account, release of funds, disputes and cost.
Anglo-American escrow and CARPA escrow: two approaches to securing funds
Escrow and CARPA escrow meet the same need — entrusting funds to a neutral third party — but rest on very different frameworks. A comparison for international transactions.
The escrow account: a complete guide to the mechanism
Definition, how it works, legal framework and use cases: the complete guide to the escrow account, to understand and secure the payment of your transactions.
Escrow of the price in the purchase and sale of a yacht
A yacht is a high-value movable asset, often international. Placing the price in escrow protects buyer and seller alike until the vessel is effectively transferred.
What becomes of escrowed money? Safety and release of the funds
Where does the money go once it is in escrow, and how is it protected? The journey of the funds, from the initial deposit to their release.
Escrow agreement: what are the essential clauses?
A well-drafted escrow agreement prevents disputes. An overview of the clauses that give it its strength.
The escrow of the price of an artwork or a collectible asset
For an artwork or a collectible asset, the escrow of the price protects both buyer and seller while authenticity and provenance are verified.
The escrow of a settlement agreement ending a dispute
When a settlement ends a dispute, placing the agreed sums in escrow guarantees that each party will perform its undertakings.
Cash collateral as a security
Blocking funds to secure an obligation: cash collateral gives the beneficiary a security that can be called upon immediately.
Escrow in private equity: investor entries and exits
Entries into the capital, disposals of holdings, price adjustments: escrow secures the financial flows of private equity transactions.
Escrow in a financing transaction
In a financing transaction, escrow makes it possible to condition the release of funds on the satisfaction of the conditions and the putting in place of security.
The joint tax liability of the buyer of a business (fonds de commerce)
The buyer of a business (fonds de commerce) is jointly liable for certain of the seller's taxes. This liability renders the price unavailable for a time.
The creditors' opposition period in the sale of a business (fonds de commerce)
After the publicity of a sale of a business (fonds de commerce), the seller's creditors have ten days to file opposition on the price. Here is how it works.
The earn-out: securing a deferred price component
Part of the price indexed to the company's future results: the earn-out aligns interests, but its payment needs to be secured.
Representations and warranties (GAP) explained simply
Representations and warranties protect the buyer against nasty surprises after acquiring a company. Here is how they work.
Escrow with a lawyer or a notaire: what are the differences?
A lawyer or a notaire: two professionals can act as escrow agent. Their frameworks differ according to the nature of the transaction.
How much does an escrow agent cost? Scale and examples
An escrow agent's fees are calculated on the sale price, according to a tapering scale. Explanations and concrete examples.
The first-demand autonomous guarantee: a user's guide
The first-demand autonomous guarantee gives the beneficiary rapid payment, independent of the underlying contract. How it works and how to back it with an escrow.
Asset deal or share deal: which structure should you choose?
Buy the assets or buy the company? The choice between an asset deal and a share deal drives the taxation, the liabilities assumed and the way the price is secured.
Conventional or judicial escrow: what are the differences?
Escrow can arise from an agreement between the parties or from a court decision. Distinguishing the two regimes helps in choosing the right route to secure funds.
The CARPA account: definition, how it works and safeguards
Behind every escrow entrusted to a lawyer lies the CARPA account. Definition, how it works, who can open one and what it guarantees for your funds.
Real estate share deal: securing the sale of SCI interests
Selling the interests in an SCI is not a classic property sale: with no notary required, escrow of the price becomes the tool for securing the transaction.
Securing the price in a company share sale
Unlike a business (fonds de commerce), a share sale does not require a statutory escrow. It nonetheless remains a key tool for securing the price and the representations and warranties.
Escrow of the price in the sale of a business (fonds de commerce)
When a business (fonds de commerce) is sold, the price cannot be handed over to the seller straight away. An explanation of why the price is unavailable and the role of escrow.