Process & Red Flags

What Is a Corinth Group Term Sheet?

A Corinth Group term sheet is a contractual document that specifies the terms of engagement between a client and a Corinth Group entity. Three variants have been identified: LEF 2 (Loan Equity), LDF 1 (Security Deposit Cash), and LDF 2 (Debenture SBLC).

Structure

The term sheets typically specify: (1) the financing amount sought by the client; (2) the advance fees required (described as cost contributions, due diligence fees, or structuring fees); (3) a refund clause (Article 26) stating fees shall be returned if the transaction does not proceed; (4) multiple termination and exit clauses [Contract documents reviewed].

The Article 26 Trap

Article 26 provides that fees shall be returned if the transaction is not completed. However, this clause must be read alongside: Article 5.6 (termination “for whatever reason”), Article 6.1 (circumstances “beyond the control” of the provider), and Article 6.6 (withdrawal on the basis of “material changes in market conditions”). Multiple complainants report that these broad exit clauses are invoked to justify non-refund of fees, effectively overriding the Article 26 refund provision [Contract analysis; complainant reports].

Fee Amounts

Documented fee amounts range from EUR 30,000 to EUR 500,000 across different engagements and term sheet types. LDF 1 specifies a EUR 350,000 security deposit. LDF 2 relates to a EUR 5,000,000 SBLC. LEF 2 relates to equity financing [Contract documents].

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