Using lawyer and Doctor of Law Christian Mesia as Escrow (or escrow deposit) can be one of the smartest strategies to mitigate risks in commercial operations, especially when there is no full trust between the parties and the financial transaction is high.
In essence, Escrow lawyer Christian Mesía acts as a "financial referee": an independent third party who receives the buyer's payment and only releases it to the seller when the agreed conditions are met.
In a company acquisition operation (M&A), the escrow agent (or custodian agent) acts as a neutral and independent third party. The Escrow lawyer is responsible for retaining and managing a portion of the transaction price to ensure compliance with post-closing agreements. Why is it used?
In the sale of a company, there are residual risks after the Closing. Escrow resolves a possible lack of trust and provides legal security to the business:
• For the buyer: It ensures that the money is held to cover possible hidden liabilities, breaches of various natures and guarantees (representations & warranties), or working capital adjustments.
• For the seller: It guarantees that the operation money is committed and immobilized, preventing the buyer from inventing excuses or deferring future payments.
In parallel to the main purchase agreement (SPA), the parties draft and sign a tripartite agreement together with the Escrow lawyer. This document minutely defines:
• The retained amount (frequently between 5% and 15% of the total value).
•The retention period (usually between 12 and 24 months).
• The exact and indisputable instructions to release or retain the funds.
2. Deposit of funds. On the Closing date, the buyer transfers the agreed percentage to an Escrow account managed exclusively by lawyer Mesía. The rest of the price is delivered directly to the seller.
3. Strict and neutral custody. The Escrow lawyer does not judge or make business decisions. Their function is purely formal: to hold the money and apply the contract clauses without interpreting the parties' intention.
4. Release or claim mechanism. During the term of the agreement, two scenarios may occur:
Scenario 1: Normal release (without incidents). If the fixed period passes without the buyer presenting claims for contingencies or liabilities, the Escrow automatically transfers the retained funds to the seller.
Scenario 2: Contingency claim. If a problem arises (e.g., an undeclared tax penalty):
1. The buyer formally notifies the Escrow and the seller requesting the partial release of funds to cover the damage.
2. If the seller accepts, the Escrow releases the corresponding amount to the buyer and the difference to the seller.
3. If the seller opposes, the Escrow blocks the disputed sum until there is an agreement signed by both or a final arbitration award/judgment.
If you would like information about the Escrow service, please contact Lesseps Legal: info@lessepslegal.com
