Customers who don't pay are an unfortunate but inevitable reality of doing business. Some will tumble into bankruptcy; others will continue to operate and perpetuate the suppliers' risk of nonpayment. Usually in this environment, communication from the customer is substantially reduced, if not stopped. What can a supplier do to better evaluate this risk and act to minimize its potential loss
Creditors are often surprised by how difficult it is to allow and issue payment on their proof(s) of claim.[1] Many creditors believe that it is very clear that they are owed money. Indeed, all correctly filed proofs of claim are prima facie allowed until the court determines otherwise.
One of the best kept secrets in the tooling industry is an Ohio law that grants a lien to molders and mold-builders for services performed related to dies, molds, patterns and forms.
A bankruptcy judge in Texas has issued one of the most compelling preference rulings in recent history. In the chapter 7 case of Brook Mays Music Co. pending in Dallas, the court ordered at the outset of a chapter 7 case that the chapter 7 trustee NOT pursue certain preference actions in an effort to reel in “preference litigation run amok.” In making this ruling the court stated:
As most savvy collection managers know, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) granted suppliers a priority in payment for goods received by the debtor within 20 days before bankruptcy. The new statute undoubtedly increased the chances that suppliers will achieve a significant recovery.
