Prompted by the failure of such high-profile names as TJ Hughes, Habitat and Life & Style, BHETA is advising affected suppliers to act on Retention of Title as quickly as possible in order to have a chance of reducing bad debts.
Specialist credit insurance broker Reynolds Trade Credit, one of the advisors to the BHETA Credit Forum, has been urging members to check their ROT in their Terms and Conditions.
ROT is designed to provide a supplier with security and an opportunity to attempt to minimise potential loss in the event that a customer falls into insolvency.
While the company cannot comment on the legal validity of each and every ROT clause, it is advising vulnerable suppliers to enforce this if it has it without delay, as every day that passes without attempting to enforce the ROT reduces the chances of a successful recovery.
BHETA says the supplier should make immediate contact with the insolvency practitioner, notifying its intention to exercise its rights under ROT, and withdrawing the rights of the insolvent company to sell its products, which should be marked as the creditor’s goods.
The supplier should take an inventory of stock on site, have it signed for by an authorised signatory and arrange a date to recover the stock.
If there are attempts to continue trading the company the supplier should get assurances that it will be paid for the stock.
The quarterly BHETA Credit Forum discusses a host of credit-related issues, and BHETA members can come along to their first meeting for free. Future meetings are on July 21 and October 20. To book a place please email firstname.lastname@example.org.