What is a Bulk Sale Escrow?
Bulk sale escrows can be defined as an escrow agreement placed on the sale of inventory, business assets, or a company. The escrow is designed to protect the assets of unsecured creditors. It is designed to eliminate the possibility of the seller using the money from the sale on other things besides taxes owed or debts to be paid.
If a business is experiencing financial difficulty, it can lessen its issues by downsizing business and selling portions of inventory or business assets. An escrow agent will collect the funds from the seller to protect them from being used on unprofitable business deals. The escrow agent will then forward the funds to the right parties. Generally, escrow fees will be charged for this service and the service costs are split between the buyer and the seller. However, the two parties can agree in writing to any specified amount of payment.