For most businesses, the primary reason for registering on the PPSR is to be able to recover their goods (ROT) or protect assets that may have been rented to an insolvent company.
When a customer becomes insolvent, speed is vital. We are not talking about beating the insolvency practitioner to the premises and ripping out your goods, but rather getting on site to identify the goods or equipment in which you have an interest. There are two reasons for this:
- You and the insolvency practitioner will have an agreed list of goods and equipment in which you have an interest. Aside from protecting your position, it is of great assistance to the insolvency practitioner who may otherwise deal with your property.
- The identification process gives you an idea of the value of the claim. Your organisation may be owed hundreds of thousands of dollars, but if the value of recoverable property is negligible, you may be better off writing the debt off, and moving on.
The insolvency practitioner will normally ask for documentation to support your claim. This will normally include:
- The security agreement creating your security interest. This may be your terms of trade, hire agreements, consignment agreements or similar.
- Outstanding invoices.
- Details of the property in which you claim an interest.
- A copy of the financing statement.
It is very important to respond promptly to requests for information or documentation, or your property may be sold.
Finally, do not expect it to be easy. If the insolvency practitioner recognises your claim, then it means less money for any competing secured creditor with an interest in your property, or for unsecured creditors in general. The practitioner has a responsibility to properly test your claim