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In all cash deals like this, is there just a bank wire transfer that's made in the purchase amount from one company's account to the other's once everything has

by stevenj 12y ago

In all cash deals like this, is there just a bank wire transfer that's made in the purchase amount from one company's account to the other's once everything has been approved and the deal has closed?

giarc 12y ago
I can't answer your question directly, but I'm reminded of a story a friend once told. He was a new lawyer at a large firm. He was helping with a large deal and the bank couldn't get a hold of the lawyers listed above him. The bank called him and said "Is this $12.5 million transfer approved?" Do which he said yes, and 1 second later, 12 million dollars was moved from one account to another. So perhaps, with some authorization calls, it is as simple as a wire transfer.
- chx 12y ago
  My brother once put in a 1M EUR transaction instead of 1M HUF he wanted and it went through without a hitch... even though his account didn't have that sort of money or even anything close to that. That was weird and disconcerting.
- ToastyMallows 12y ago
  Geez, to have that authority. Crazy.
Elessar 12y ago
A simple SWIFT transaction (wire payment) is generally enough, though in order for the actual transaction to move, there are confirmation and settlement procedures. All of which depend on the company and bank policies (for example, American Companies are all by law offered the option to use 4-eye verification processes to prevent a single person from making a tx, two to confirm etc etc). Giarc's story is the confirmation process, likely being chased down by the back office at the bank as they go through the various procedures that minimize fraud and mistakes involved when moving large sums of cash. If FX is involved, then they'll likely need to purchase the sum in a different currency (if they do not already have cash in that currency) and use the result to settle in another bank account. For example, an American company purchases 15 million euro to settle in a German bank account that belongs to the purchased.
pearjuice 12y ago
There's probably a whole loop of transfers with one or more Double Irish arrangements, some Dutch sandwich and in the end all the money finds its way to the Cayman Islands or Swiss banks.
FireBeyond 12y ago
I worked for a law firm in Australia representing a resources company. This company had decided to buy a mine. I saw a bank statement, with an initial deposit of $200 to open the "checking" account, an ATM withdrawal, and then on the date of settlement, 12 deposits of "US$100M" each from entities like "Chase Manhattan Holdings" and other corporate banks. The end result was a balance somewhere in the order of $1.5B AUD - the number overflowed the little shaded box for balances. Perhaps entirely unsurprisingly, the case that this bank statement was being used in? "ATO vs [Client]" (ATO being the Australian Tax Office) for "deficiencies in income declaration"...

by stevenj 12y ago

In all cash deals like this, is there just a bank wire transfer that's made in the purchase amount from one company's account to the other's once everything has been approved and the deal has closed?

giarc 12y ago

I can't answer your question directly, but I'm reminded of a story a friend once told. He was a new lawyer at a large firm. He was helping with a large deal and the bank couldn't get a hold of the lawyers listed above him. The bank called him and said "Is this $12.5 million transfer approved?" Do which he said yes, and 1 second later, 12 million dollars was moved from one account to another. So perhaps, with some authorization calls, it is as simple as a wire transfer.

chx 12y ago
My brother once put in a 1M EUR transaction instead of 1M HUF he wanted and it went through without a hitch... even though his account didn't have that sort of money or even anything close to that. That was weird and disconcerting.
ToastyMallows 12y ago
Geez, to have that authority. Crazy.

Elessar 12y ago

A simple SWIFT transaction (wire payment) is generally enough, though in order for the actual transaction to move, there are confirmation and settlement procedures. All of which depend on the company and bank policies (for example, American Companies are all by law offered the option to use 4-eye verification processes to prevent a single person from making a tx, two to confirm etc etc). Giarc's story is the confirmation process, likely being chased down by the back office at the bank as they go through the various procedures that minimize fraud and mistakes involved when moving large sums of cash. If FX is involved, then they'll likely need to purchase the sum in a different currency (if they do not already have cash in that currency) and use the result to settle in another bank account. For example, an American company purchases 15 million euro to settle in a German bank account that belongs to the purchased.

pearjuice 12y ago

There's probably a whole loop of transfers with one or more Double Irish arrangements, some Dutch sandwich and in the end all the money finds its way to the Cayman Islands or Swiss banks.

FireBeyond 12y ago

I worked for a law firm in Australia representing a resources company. This company had decided to buy a mine. I saw a bank statement, with an initial deposit of $200 to open the "checking" account, an ATM withdrawal, and then on the date of settlement, 12 deposits of "US$100M" each from entities like "Chase Manhattan Holdings" and other corporate banks. The end result was a balance somewhere in the order of $1.5B AUD - the number overflowed the little shaded box for balances. Perhaps entirely unsurprisingly, the case that this bank statement was being used in? "ATO vs [Client]" (ATO being the Australian Tax Office) for "deficiencies in income declaration"...