Against a company after it enters insolvency
Where a customer has already entered an insolvency process, the onus is on you to prove that the goods are still yours and not the customers. Contact the insolvency practitioner (IP) urgently. Until notice is received, the IP may continue to use or sell the goods without payment to you. After they have been notified that the goods are yours they could be held personally responsible to pay you for them you if they sell them.
Attend the customer’s site as quickly as possible to identify and agree a stock take with the IP’s team. This provides a shared understanding of which goods are present.
The IP will issue a ROT questionnaire for you to complete and use this to assess the validity of your claim. As part of which you will need to detail the ROT provisions, the supplied goods, and evidence that the customer has not paid for them.
Early notification is required because the IP will only have limited knowledge of the company (and trading history). An IP is protected from personal liability for the seizure and/ or disposal of another’s property or goods where they have reasonable grounds to believe that the goods belonged to the customer company.
The IP may have sold the business and assets already and may tell you to speak to the buyer. In fact, the IP will only have sold the company’s property to the buyer (and not therefore your property). Try to make arrangements with the buyer to pay for or return the goods, but if these discussions fail you may be able to claim against the IP instead.
If an ROT claim fails, the claim will be an unsecured claim in the insolvency process (and a proof of debt will need to be filed with the IP). Depending on the financial situation and realisations available for the company subject to the process, distributions may not be available to unsecured creditors.
Click here to read more about how assets are distributed in a company insolvency.