Editing Escrow (section)

===Mergers and acquisitions===
Escrow arrangement is often used as a part of [[mergers and acquisitions]] a supplement that warranties and indemnities offered by the seller(s).<ref>{{cite web|url=http://www.elementalcosec.com/guides/ma-escrow/|title=Guide to M&A Escrow - Elemental CoSec|website=www.elementalcosec.com}}</ref> This will be particularly likely where the [[credit risk]] of the seller(s) is of poor quality and the buyer is concerned about their ability to recover any sums that may become due.

Unlike many other forms of escrow, escrow arrangements in corporate transactions are often designed to last for extended periods rather than simply to complete the transfer of an asset. There is also commonly the requirement for an escrow agent to adjudicate on the validity of a claim on the escrow funds, which can lead to the risk of the dispute between the parties.

Due to the length that the funds are held, the escrow arrangements need to take into account different considerations to those for other escrow arrangements, for example (i) information provision to the parties; (ii) application of [[interest]] earned on the funds; and (iii) [[credit risk|credit worthiness]] of the [[financial institution]].