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 protect their earnout. If you're advising a business sale or buying a company, this episode is a masterclass in how not to leave money on the table. #IndemnityEscrow #MergersAndAcquisitions #DealStructuring #EscrowTrap #IndemnificationClause #RepresentationsAndWarranties #SurvivalPeriod #IndemnityCap #DeductibleBasket #TeflonClause #CarveOutDeal #SellerProtection #BuyerRemedies #MALiability #Business #MergersAndBuyouts #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo