Attorney Escrow Agent
Escrow Services for Business Purchases
When a business changes hands, both sides need confidence that money and documents will move only when the agreed conditions are met. We act as a neutral attorney escrow agent, holding funds in a regulated attorney escrow account and releasing them strictly in line with the parties' written agreement.
Overview
What this involves
Business acquisitions and asset purchases often involve large sums moving between parties who may not know each other well, and who are sometimes in different countries. A deposit may need to be held while due diligence is completed. Purchase funds may need to wait until licenses are transferred or documents are signed. Part of the price may be held back to cover post-closing adjustments.
Karl, Mauritson & Cuff LLP can serve as escrow agent. We help draft a clear escrow agreement, hold the deposit and purchase funds in an attorney escrow account, check the documents and conditions the parties agreed, and release funds only when those conditions are satisfied. Every step is documented.
Where the firm also represents one of the parties to the transaction, we disclose this at the outset and address it in the escrow agreement, so that everyone understands our role.
How We Help
How we can help
- Drafting the escrow agreement. We prepare or review an escrow agreement that sets out exactly what is being held, the conditions for release, timelines, and what happens if the parties disagree.
- Holding deposits and purchase funds. Funds are held in an attorney escrow account, such as an IOLA account or, where appropriate, a dedicated escrow account, separate from the firm's own money.
- Verifying documents and conditions. Before any release, we confirm receipt of the documents and evidence specified in the agreement, such as signed transfer documents, lien releases, consents or license transfers.
- Holdbacks and staged releases. We administer portions of the price held back for working-capital adjustments, indemnities or other post-closing obligations, and release them as agreed.
- Neutral, documented disbursement. We release funds only in line with the agreement or joint written instructions, confirm each disbursement in writing and keep a complete record for all parties.
- Handling disagreements. If the parties dispute a release, we follow the mechanism in the escrow agreement and hold the funds until we receive joint instructions or a court or arbitral direction.
- Identity and compliance checks. Before accepting an engagement or funds, we carry out identity verification and anti-money-laundering checks on the parties and the source of funds.
- Cross-border transactions. We coordinate with foreign buyers, sellers, banks and counsel so that international funds and documents move in step.
Our Process
How the process works
A clear, structured approach, so you always know where your matter stands and what comes next.
Introduction and checks
We confirm the parties, run conflict, identity and compliance checks, and agree our role and fees in writing.
Escrow agreement
The parties agree and sign an escrow agreement setting out the funds, conditions, timelines and dispute mechanism.
Funding
The buyer transfers funds using wire instructions verified directly with us, and we confirm receipt to all parties.
Verification
We check that each condition and document listed in the agreement has been satisfied.
Release and record
We disburse funds as agreed and provide a written account of the escrow to the parties.
Who It's For
Who we help
Business buyers and sellers
Parties to the purchase or sale of a privately held business.
Asset purchasers
Buyers and sellers of equipment, inventory, intellectual property, customer lists and other business assets.
Cross-border parties
Foreign buyers acquiring US businesses and US buyers acquiring businesses abroad.
Partners and co-owners
Owners buying out a partner or restructuring ownership.
Brokers and advisors
Business brokers and advisors whose transactions need an independent escrow agent.
Investors
Investors making staged or conditional payments into a business.
FAQs
Frequently asked questions
Who does the escrow agent act for?
As escrow agent, we hold and release funds neutrally, in line with the escrow agreement signed by all parties. If we also represent one party in the transaction, we disclose this at the outset and address it in the agreement.
What happens if the buyer and seller disagree about a release?
We follow the dispute mechanism in the escrow agreement. Typically we continue to hold the funds until we receive joint written instructions or a court or arbitral decision.
Is interest earned on escrowed funds?
It depends on the amount and how long funds are held, which determines the type of account used under New York rules. We will explain the arrangement before funds are deposited.
How are escrow fees set?
Fees are agreed in writing before the escrow is opened. [Describe the firm's escrow fee structure.]
This page provides general information, not legal advice. Every situation is different; please contact us to discuss yours.
Request a Consultation
Need a neutral escrow agent for a business purchase?
Tell us about the transaction and its timeline. We will explain how our escrow service works and what we need from each party.