Bankruptcy

Everything works fine until it doesn’t. We all assume our suppliers are doing OK . . . until we discover that they’re not. “If a printer shuts down with supplier-owned material on the floor, several questions arise immediately. Was the consignment agreement in writing? Did it clearly state when title transfers? Were the materials segregated from the printer’s owned inventory? Were they labeled, tracked, and reconciled? Did the supplier file a UCC financing statement if required? Did it notify the printer’s existing inventory lender? Was the product consumed before the shutdown, and if so, when did payment become due? Can the supplier enter the closed facility to remove the goods, or must it first obtain permission from a receiver, trustee, lender, landlord, or court? These are not abstract legal points. They affect cash, collateral, and transaction value.” This paragraph comes from an excellent Printing Impressions article about the bankruptcy of Diamond Comic Distributors, who have…