This article, part of our Creditor’s Rights Toolkit series, serves as an essential guide for vendors navigating the complex landscape of dealing with financially distressed or bankrupt customers. It provides a detailed exploration of the options available to vendors who are proactive and quick to act when they learn of their customer’s financial woes.
The first key strategy discussed is the stoppage of delivery in transit. This strategy allows vendors to halt the delivery of goods when they discover the buyer’s insolvency. It also covers scenarios where the buyer fails to make a payment due before delivery. The post provides a thorough breakdown of the conditions under which delivery can be stopped and the necessary steps a vendor must take to implement this strategy effectively.
The second key strategy is reclamation, a process that enables vendors to demand the return of goods if they learn that the customer is insolvent. The post outlines the specific conditions and timelines for a successful reclamation demand, as well as the potential challenges and limitations vendors may face during this process.
The article emphasizes the importance of swift action in these situations, as both strategies are time-sensitive. It also strongly advises vendors to consult with experienced counsel to effectively navigate these complex situations. The post serves as a reminder that while a creditor’s rights will depend on the unique facts of each situation, proactive and diligent vendors have options to recover goods from an insolvent customer. Read the full article here.