Latin Lawyer: The Guide to Mergers and Acquisitions: Indemnity Escrows and Other Payment Guarantees

The chapter describes a series of mechanisms most used in mergers and acquisitions transactions in Mexico and Latin America to ensure that a party affected by its counterparty’s breaches of covenants or misrepresentations is adequately indemnified.

From the introduction by the editors*: The authors offer insights on escrow agreements, holdback provisions and other guarantees that may be used in the context of M&A transactions in Latin America. The chapter contains comprehensive remarks on some of the most critical issues typically related to escrow agreements, such as the selection of the escrow agent, the amount and term thereof, the use and beneficiary of interest accrued in the escrow account, and process and conditions for release of the escrowed funds. The authors also cover alternative mechanisms that may be relevant in Latin American M&A, such as parent guarantees, promissory notes and letters of credit.

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Luis Burgueño, Partner: +52 (55) 5258 1003 |

Alberto Córdoba, Partner: +52 (55) 5258 1016 |

Marisol Márquez, Associate: +52 (55) 5258 1003 |

Elías Jalife, Associate: +52 (55) 5258 1014 |