Escrow is a neutral third party involved in the financial transactions by both the parties of the transaction. When a company goes into liquidation and appoints a trust for overseeing the entire process of liquidation there is a lot of legal tangles involved.
In order to validate the financial soundness of the transaction the liquidating trust company ensure that the amount derived from liquidation is deposited with a third party company which is an escrow. The agreement that is entered into between the liquidating trust and the escrow agency is known as the liquidating trust and escrow agreement.
The liquidating trust and escrow agreement specifies the terms and conditions for holding the funds derived from liquidation. The agreement also specifies the period of time for holding the funds and the terms for release of funds according to the terms and conditions in the escrow agreement. The agreement ensures that the financial interest of all the parties involved in the liquidation is safeguarded at all times.
[Also Read: Liquidating Trust Agreement]
Sample for Liquidating Trust and Escrow Agreement
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