An individual has taken out a loan to set up a CD in the amount of $5 million. The CD is to be used as proof of credit-worthiness and will not be drawn upon. Once the CD is in place venture funding will be transferred to start a manufacturing company.
The problem is that the funding group requires the CD bear the name "ABC Bank in Trust for the individual." There must also be two required signatories on the account. The bank will not approve the loan unless the individual is the only owner of the CD and he is the only one with the ability to redeem. If we were to put the CD inside a Collateral Vault and set up a Third Party Pledge could that satisfy both the bank and the capital funding group?
When dealing with sums of this magnitude and conflicting business requirements, the best advice is to get the parties together to negotiate a compromise position. It may be necessary to engage an attorney. There's no way to guess whether the action you propose would satisfy each of the parties.
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When dealing with sums of this magnitude and conflicting business requirements, the best advice is to get the parties together to negotiate a compromise position. It may be necessary to engage an attorney. There's no way to guess whether the action you propose would satisfy each of the parties.
