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August 2015 Archives

Paperwork Still Counts. Don't Start a Deal Without it,...Signed!!!

Tribeca negotiated the purchase of a portfolio of loans secured by real property, for $47 million. The contract required a $1 million deposit which would become non-refundable liquidated damages upon the waiver of contingencies. Tribeca negotiated a joint venture agreement with its investor who would fund the $47 million, except he had only $16 million. He was waiting for financial information determine whether he could borrow the missing $31 million. He did not sign or have his company sign the joint venture agreement while waiting. He did wire $1 million to First American Title. No instructions accompanied the wire transfer. Tribeca told the escrow officer's assistant that it was for the deposit for this escrow, and that's how First American entered it, even though it had no escrow instruction from the owner of the money to do so. Tribeca was too busy negotiating with First American over a $950.00 handling fee and an indemnity clause.