Personal Property Securities Act: implications for practitioners
Failing to identify a security interest and inappropriately distributing funds to creditors may lead to litigation
The Personal Property Securities Act (PPSA), which took effect 30 January 2012, appears to contain some 'grey' areas and uncertainties which will inevitably result in differing opinions in the interpretation of the legislation. Such differing views will need to be resolved by litigation adding to the costs associated with the process.
This article, co-authored by Deloitte Corporate Reorganisation Group’s, Tim Norman and Adrian Hunter, is featured in the March edition of the Australian Insolvency Journal published by the Insolvency Practitioners Association. Titled Personal Property Securities Act – with greater knowledge comes increased responsibility, it highlights some of the practical issues that insolvency practitioners and financiers alike will face in dealing with the introduction of the PPSA from 30 January 2012.
The thesis of the article is that the PPSA has significant implications for:
- Debtor finance and the ability to extinguish existing PMSIs
- Manufacturing and wholesalers with reservation of title PMSI registration requirements
- Extension of security interests to comingled goods
- Estimated Statements of Position ('Security Positions')
- Traceability of security interests through stock to debtors to process to assets purchased
- Download the article to gain an insight on the practical aspects of what the PPSA means to the financial service industry and the importance of being aware of the consequences in failing to perfect security interests.
Re-published with permission from the Insolvency Practitioners Association.