Not necessarily. The snippets of information given out by SGH...

Not necessarily.

The snippets of information given out by SGH indicate that the escrow money is security for warranty claims.

The warranties will be set out in the purchase agreement, and if it's a normal purchase contract there will also be a clause saying that the only warranties are those which are specified in the contract.

So a decision could be made that SGH is not likely to succeed in any warranty claims, in which case the escrow money is handed over to Watchstone.

But the SGH announcement in Sept said they were making claims "arising from SGH UK's purchase of Quindell's Professional Services Division"

So SGH may have other causes of action against Watchstone which are not warranty claims, such as misrepresentation by Quindell or a claim under something like the UK equivalent of Trade Practices Act.

So even if everyone agreed these non-warranty claims were valid, looks like the escrow money could still be handed over to Watchstone.