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As a Creditor, what can I do to protect my position?


Often, the first a creditor hears of an insolvency is when they receive notice from the Insolvency Practitioner.


The notices will differ depending on the insolvency procedure being used. Some formal procedures require that creditors are notified prior to the company officially being declared insolvent, others after.


However, there are a number of common features that should be addressed in all instances.


Proof of Debt - This document should be included with the notice that you receive and should be completed and returned to the Insolvency Practitioner as soon as possible as this enables the registration of your claim.


Retention of Title (ROT) Contrary to popular belief, goods do not automatically remain the property of the seller until paid for. The Sale of Goods act states that title passes when the goods are sold, irrespective of whether payment has been made.


However, if your contract with the insolvent company is for the supply of goods and includes a Retention of Title clause, you may be able to recover the goods sold which remain.


You should contact the Insolvency Practitioner immediately and notify him of your claim. This is a complex area of law and so it is wise, in advance of such circumstances, to take your own legal advice to ensure that your contracts do contain a valid, enforceable, useful ROT condition.


Creditors Meeting / Proxy - Depending on the insolvency procedure, there may be a Meeting of Creditors which you will be able to attend. Should you wish to vote at the meeting but be unable to attend you should complete and submit the Proxy form that you will have received. Also, if you wish to attend the meeting representing a limited company a duly signed Proxy form will be required to be submitted in advance.


Should you have any uncertainties about these matters, you should contact the Insolvency Practitioner to ensure that things are handled correctly.



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