Escrow Solutions Overview
Acting as an independent and neutral third party, J.P. Morgan holds assets in escrow and disburses them pursuant to the terms of the underlying agreement. Our global team of experts will work with you to develop an appropriate escrow structure for your transaction.
See below for examples of transactions we support with escrow services:
Mergers & Acquisitions
At the closing of an M&A, a portion of the purchase price is placed in escrow and held until the terms of the escrow agreement have been satisfied. Can mitigate post-close risk of misvaluation (target value changes) or information asymmetry (false representation and warranties from target).
Good Faith Deposit
A portion of the purchase price for an M&A is placed in escrow prior to close. Facilitates bidding – demonstrates serious interest and/or complies with regulations (e.g., if government approval is needed).
The purchase price for an M&A is placed in escrow. Facilitates closing – centralizes funding sources and enables funds to be on hand prior to close; can also facilitate exchange of company stock from seller for payment of cash from buyer.
Debt Capital Markets
Segregate proceeds to use to close M&A, refinance debt, or other growth purposes (e.g., construction); can mitigate risk of proceeds not being used for intended purpose, and of M&A closing (or not closing) after bond is issued.
Segregate loan proceeds to facilitate disbursements for intended purpose, or hold collateral for loans so lender can mitigate against default.
Defendants deposit funds pursuant to settlement pending disbursements to plaintiffs.
Defendants deposit funds at court request so plaintiffs have comfort that funds will be available if the court rules in their favor or if defendants settle.
For more information, please contact your local representative.