Briefing Note: Event and Hospitality related Escrow Solutions
The events and hospitality sector is one of the worst hit by the effect of the COVID-19 pandemic. Event organisers are finding it increasingly difficult to obtain “Event Cancellation Insurance” given the high probability that any such event may need to be postponed or cancelled.
With events still being planned for as early as January 2021, an event organiser has to seriously consider the impact of cancellation or delay. Aside from the event itself, other costs will need to be considered such as refunds, paying for contracted services and even compensation, if cancellation is at short notice.
The types of events that could benefit from LawDeb’s escrow solutions include: sporting events, concert performances (live music, film and theatre), festivals, exhibitions and trade shows.
There is currently a general concern within the events and hospitality sector around the solvency of counterparties and the increased risk of events being cancelled. All counterparties within the sector are worried about the return of deposits or other amounts paid if events have to be postponed or cancelled due to COVID-19. Some of the effects of this are:
1. Event organisers not wanting to hand over substantial deposits to hosting venues or other suppliers;
2. Ticket agents reluctant to part with ticket revenues to event organisers given the increased risk of cancellation and refunds being necessary; and
3. Some of this cash is required by the event organisers and suppliers in advance of the event to enable them to perform their services.
Parties can pay funds in to an escrow account controlled by an independent third party such as LawDeb, who will only move money out of that account upon receipt of written instructions from the relevant parties.
Event related escrows can be utilised in the context of large events, like the ones described above by companies organising, hosting, promoting or sponsoring large scale events. They provide an efficient solution for all concerned if the event has to be cancelled or postponed as the funds remain held in accordance with the terms of the escrow agreement.
This escrow solution gives event organisers and connected counterparties the required comfort that the funds will be made readily available to (i) the designated recipients if the event goes ahead or (ii) returned to each relevant depositing party if the event does not go ahead.
This structure is efficient and easily dealt with by LawDeb as Escrow Agent. Our Corporate Trust team is vastly experienced in the provision of escrow services, frequently engaging with law firms and other advisers in the events and hospitality industry.
We are valued for our independence and best in class service:
- We have standard documentation available for use
- We can open escrow accounts without delay
- Our KYC on-boarding process is efficient and quick
Please do contact key team members with any questions:
Eliot Solarz, Head of Corporate Trust: 07713 480 979 / firstname.lastname@example.org
Tom Speer, Associate Director: 07593 572 049 / email@example.com
Nigel Letheren, Associate Director: 07850 941082 / firstname.lastname@example.org