We’ve recently seen vivid proof of the need to respond promptly to an Administrator when laying claim to registered property assets. This is particularly important in situations involving saleable assets/machinery. When we look at what happened with the recent collapse of the Hastie Group, the numbers are quite alarming.
This case illustrates that having your interest noted on the Personal Property Securities Register (PPSR) alone is not enough if you don’t respond to communications from the Administrator. Such was the case when McGrath Nicol, the Administrators of Hastie Group, who tried to contact the creditors. There were 995 registrations of equipment, yet after many creditors failed to respond to contacts made by email, letter and public notice advertisements, 77% of items remained unclaimed.
So the Administrators sought a court order to sell or dispose of the equipment which was subsequently auctioned off. We’re talking 3,684 pieces of equipment, with proceeds being held in escrow for 3 months after the sale.
Even if your equipment or assets were deployed prior to the introduction of PPSR and therefore seen as being covered under the 24 month transitional period, if the Administrator doesn’t know of your of interests, the assets could be lost. So if you have assets out in the field and you don’t lay claim to those assets, this Federal Court ruling proves you may lose the assets altogether.
Finally, be very wary of your assets being utilised long term by 3rd parties of your client. Although you may have the correct PPSR and acknowledgement by your client, if they for whatever reason supply those assets to another party on an extended term (over 90 days), that 3rd party and more importantly their administrator/receiver will potentially have no knowledge of your existence let alone acknowledge your registered interests as their dealings are with your client, not you!
For further understanding on PPSR click here