Buyer is interested in purchasing, in a stock sale, Company that is owned 100% by an S Corp ESOP. The Stock purchase agreement provides for the establishment of an escrow account to cover any pending or potential claims of the Company. The escrow account will be funded with a portion of the proceeds from the sale of the stock. After two years, any remaining money in the escrow account will be distributed.

Are there any fiduciary issues that we should be concerned about with respect to this escrow account?

Yes....

This is a common circumstance in any purchase of all of the equity of an enterprise. It can work, if properly done. I suggest that the ESOP fiduciary engage competent counsel and an experienced ESOP transaction trustee.

Sorry for this kind of an answer, but you are getting into the area where we ESOP folks think we should get paid.