The role of the escrow account agreement in the squeeze-out procedure

Abstract

The article is devoted to the analysis of an escrow agreement. The legal regulation of this contract is determined in the Civil Code of Ukraine. The specified contractual construction is also applied within the squeeze-out procedure, i.e. the mandatory sale of shares by shareholders at the request of a person (persons acting jointly) who is the owner of a dominant controlling block of shares. The research argues that the norms of the Law of Ukraine "On Joint Stock Companies" contain separate provisions regarding the escrow account and are essentially special in relation to the prescriptions of the Civil Code of Ukraine.
 It was established that the parties to the escrow agreement are the account holder, the beneficiary and the bank. Within the squeeze-out procedure defined by Art. 95 of the Law of Ukraine "On Joint-Stock Companies", the owner of the escrow account is the applicant of the public irrevocable claim, while the shareholders whose shares are subject to redemption are the beneficiaries and have the right to receive funds from the escrow account. Beneficiaries under the escrow agreement may also be the legal assignees of such shareholders or other persons who, in accordance with the law, has the right to receive funds. It is substantiated that in the analyzed contractual structure the bank performs the role of an independent party, an escrow agent trusted by both parties.
 It is emphasized that the moment of opening an escrow account in the squeeze-out procedure and the term of depositing funds into it are clearly separated at the legislative level. The second one is closely related to the time limit for submitting a competing claim specified by the Law. The advantages and disadvantages of using this approach in national legislation are characterized.
 The changes that have taken place in the national legislation regarding the escrow agreement in connection with the adoption of the Law of Ukraine "On Joint Stock Companies" in 2022 have been analyzed. Attention has been drawn to the increase of the period during which the bank, in which the escrow account is opened, is obliged to make payments to the beneficiaries due to them.