Holdbacks

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Holdbacks

When a company is acquired, oftentimes the acquiring company requires that not all funds are immediately distributed to the owners/shareholders of the acquired company. The acquirer may holdback funds to cover unknown or known expenses and legal contingencies to be discovered or resolved in the near term.  The company will typically set a timeframe for these items to be resolved and once resolved the remaining escrowed funds are released to be distributed to the acquired company’s owners/shareholders.

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