Escrow services are primarily used to mitigate financial risk.
This is critically important when closing transactions, especially when one or more parties are located in different jurisdictions.
Different types of risk covered by an escrow agreement include:
Counterparty risk
Where one party is concerned that the other party will be unable to meet its obligations, funds are held in escrow until one or both parties meet certain conditions.
Price risk
Where there is difficulty in valuing an asset, the price differential may be held in escrow until actual performance can be measured.
Execution risk
Where the parties wish for a transaction to be executed according to a pre-agreed sequence of events, the funds are held in escrow and released in an appropriate sequence.
Historically law firms held clients’ funds on account for a particular transaction. However, due to increasing risks and client requirements, the preferred option is to use an expert escrow agent.
JTC ’s independent escrow agent services
As an independent escrow agent, we are able to successfully mitigate risk and deliver a complete range of escrow services to both public and private companies.
Our escrow services team is experienced in delivering flexible solutions for a wide range of transactions and will ensure negotiations close quickly, accurately and securely.
We have the expertise to administer all types of escrow agreements, regardless of complexity, whilst ensuring these agreements are seamlessly coordinated in conjunction with our other services.
In addition, we work closely with a panel of world leading banks and are able to negotiate preferential interest rates on deposits.
Some example escrow services include:
- Wire transfer and deposit services.
- Good-faith deposits for mergers and acquisitions.
- Indemnity deposits.
- Collection of split fees from joint ventures.
- Litigation and arbitration awards.
- Private transactions involving family offices or high-net-worth individuals.
This publication is intended to provide an overview of the subject matter and is not comprehensive in nature or to be construed as legal or tax advice. We recommend that clients seek professional advice on any particular matter.
