What can be salvaged from the wreckage of insolvency? Michael Frisby & Oliver Lawson report
In the current economic environment, more clients are experiencing customer payment default. When a debtor company fails to pay or becomes insolvent, clients want to know what actions they can take to mitigate losses, rather than simply claiming as an unsecured creditor in liquidation. The options available will depend on the circumstances of the case, but it may be possible to recover goods and in certain circumstances directors of the debtor company may be personally liable for the debt.
Where goods have been supplied under a contract containing a retention of title (RoT) clause, an unpaid seller can recover goods in the event of non-payment.
It is essential to act quickly in pursuing an RoT claim. A written demand should be made to the debtor (or usually the administrator, liquidator or receiver of the debtor) notifying them that you are exercising your right to recover your goods and demanding that they be made available for collection.
