Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
The Indemnity Escrow Trap in M&A Deals
When a company is sold, a chunk of the purchase price often sits in escrow for 12 to 18 months to cover potential indemnity claims. But what happens when the buyer files a claim for a problem that existed before the deal closed — and the seller disagrees? In this episode, Lucas and Luna walk through a real-world carve-out deal where a $12 million escrow dispute nearly killed the transaction. They explain how indemnity caps, baskets, and survival periods are negotiated, why sellers often underestimate the risk of escrow traps, and how one savvy seller used a 'Teflon clause' to…
The skinny
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