Escrow services

Insight into the typical components of approximately 2,500 unique M&A transactions, including details on the percent of purchase price placed in escrow, strategic versus financial buyer differences, sector differences, escrow termination periods and transparency into claim types and payouts.

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To mitigate transaction risk, J.P. Morgan offers Holdback accounts – enabling clients to place a portion of the purchase price in escrow until the terms of an agreement are satisfied. Holdbacks offer a way for the buyer to claw-back funds directly from the seller in the event that certain conditions are not met.

J.P. Morgan offers good faith deposits, which hold a portion of the transaction purchase price in escrow to help buyers and sellers facilitate bidding and comply with regulations. J.P. Morgan can also distribute termination fees from the escrow funds if the transaction is cancelled.

Regulations in certain jurisdictions, such as the Takeover Codes of Hong Kong and the United Kingdom, require a cash confirmation statement from the financial advisor in an M&A deal that sufficient cash is available to move the transaction forward. J.P. Morgan provides the financial advisor the assurance that funds will be readily available and segregated throughout the duration of the offer.

J.P. Morgan offers buyers escrow accounts for deposit of the full transaction purchase price to centralize funding sources and hold liquid funds before closing. We also provide a variety of services to facilitate the transaction:

• Closing agent escrows – These escrows facilitate the exchange of company stock from the seller for cash payments from the buyer.
• Paying agent services – J.P. Morgan disburses funds to the selling shareholders directly from an escrow account. We can efficiently manage all aspects of the process, from inspecting presentations and share certificates, to resolving issues and promptly paying shareholders.

J.P. Morgan can establish an escrow or “qualified settlement fund” at the conclusion of a class action lawsuit to hold the settlement amount on behalf of the defendants. We work closely with the claims administrator to initiate payments to the class members of the settlement.

During the course of an appeals process, the defendant may be asked by the courts to deposit some or all of the potential award into an escrow account. J.P. Morgan offers escrows to hold these funds, giving plaintiffs and defendants the assurance that funds will be available upon the court ruling.

Funds are held in escrow until a settlement is reached between the parties disputing ownership of funds. Such disputes may be resolved through arbitration outside the judicial system.

Defendants deposit funds into escrow at the request of the regulatory agency.

Escrow can help all parties mitigate bankruptcy-related risks and satisfy legal and/or compliance requirements. Transactions sometimes referred to as 363 Sale or Stalking Horse bids may require a portion of the purchase price to be placed into Escrow as good faith deposits while seeking court approval, or courts may require that bankruptcy-related fees (for example, attorneys, accountants, other specialists) be placed into escrow.

When you execute global transactions with our Escrow Services team, you tap into an integrated network of escrow specialists in the U.S., Europe, Asia and Latin America who have extensive experience in cross-border escrow solutions and can help you understand local nuances affecting your escrow transactions.

To help reduce the complexity of cross-border escrow transactions, J.P. Morgan can provide standard contract templates – valid for a variety of jurisdictions and governing laws – that can be customized to specific structures.

Our team of worldwide professionals is solely dedicated to escrow and is ready to assist you with your transaction needs anywhere, anytime. We can help coordinate across time zones and jurisdictions, and help minimize cross-border transaction risk.