Earlier this year, independent meat retailer Super Butcher was placed into administration with debts in the order of $8 million owing to creditors, mostly meat wholesalers. Although the retailer was able to be saved from insolvency by being bought out, the position of unsecured creditors is still unclear. It has been reported that around $5 million was owed to unsecured creditors, who had not registered their security interests on the PPSR, and therefore their fate now lay in the hands of liquidators.
The fallout from the financial collapse of Super Butcher should be a loud and clear warning to suppliers of the importance of getting registered on the PPSR. Many suppliers conduct business on retention of title arrangements or on consignment, and these arrangements are now considered to be security interests under the PPSA and must be registered on the PPSR to be secured. You won’t be able to just rely on your agreements anymore, and in this radical way the PPSR turns old practices on their head.