Can I get my stock back now that client has gone bust?
Q I am a supplier and have just become aware that my customer has gone into liquidation after I delivered a quantity of stock which remains unpaid. Can I get my stock back?
A You should check whether you have a retention of title (Rot) clause in relation to the goods supplied. A Rot clause allows the supplier to retain ownership over the goods supplied until payment is received from the customer. You should immediately notify the liquidator that you are making a Rot claim.
You will usually be supplied with a questionnaire to complete and return, together with documents supporting your claim. You will also have to identify goods on site which you supplied. You will not be allowed to remove your stock until the liquidator agrees your claim is valid. This can involve you both obtaining advice on the validity of the claim.
To be valid the Rot clause must be incorporated into the contract at the time of supply. Incorporation can be achieved by signature of terms/contract or by demonstrating the terms have been incorporated into the parties overall relationship through a course of dealing.
Time is of the essence and the onus is on you to make known your claim, evidence validity and demonstrate that the goods claimed can be identified.
- Lisa Lappin is director of business recovery and insolvency, Baker Tilly Mooney Moore