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Stuart J
Stuart J, Solicitor
Category: Bankruptcy Law
Satisfied Customers: 22403
Experience:  PGD Law. 20 years in legal profession, 6 as partner in High St Practice
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Administrators have sold our stock. We have a valid Retention

Customer Question

Administrators have sold our stock. We have a valid Retention of Title claim. They refuse to give us the proceeds of the stock sale. What is our legal right and action required.

Thank you.
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  Stuart J replied 3 years ago.




I did a dissertation about eight years ago about retention
of title so I know a little bit about this.

What makes you say that your retention of title claim was
valid?



In the clause, did it entitle you to have the proceeds of
sale?



Can I have the full wording of the clause please?



Did you take them to task before they sold the stock?



Is the company that is gone into administration, Ltd or it
is a partnership or sole proprietor? It would usually be limited but an
administrator can be appointed for partnerships and sole proprietors so I do
need to ask.



Customer: replied 3 years ago.

Reservation of Ownership and Assignment: Clauses from our Condition of Sale.


Univolt reserves the propriety right to the object of purchase until complete performance of all financial obligations by the customer. The customer shall be entitled to sell the reserved goods in its ordinary course of business as long as it is not in delay with payment. It shall not be entitled to dispose of the reserved goods any other way. The customers claim to payment of the purchasing price or compensation for work arising from resale of the reserved goods shall be assigned to Univolt up to the amount of Univolt`s claim to assignment by way of pledge. The customer`s claims to payment of the purchasing price or compensation for work arising from resale of the reserved goods shall be assigned to Univolt up to the amount of Univolts claim to the customer.


In case of delay in payment, the risk of cessation of payments or in the event of execution upon the customer`s assets. Univolt shall be entitled to dismantle the reserved goods and/or otherwise require them to be returned. This shall not, however, be considered to be a repudiation of the contract. The customer is required to return property. Univolt must be informed if the reserved goods are assigned by way of pledge or if the goods are affected ant other way by third party. The customer will bare any costs incurred for such third-party attachment. The customer expressly consent to Univolt`s right to assign any claims to the customer to third parties for any purpose whatsoever. Any prohibition to assign which might be applicable shall only become legally effective if this was explicitly agreed between the parties to the contract.


 


Our claim is valid because we have all the supporting documentation and a signed Condition of Sale from the companies (Ltd) director, agreeing to our Con. of Sale. The Administrators also agree valid but the stock has already been sold.


 


I can see no clause that states proceeds of sale. Should we have this incorporated in our Condition of Sale?


 


Did they take them to task before they sold the stock? Please explain, I am not aware of the procedure. Thank you.

Expert:  Stuart J replied 3 years ago.




Okay.
Thank you your claim to the assignment of the resale of goods to you by way of
pledge has been ruled by court to create a charge which, against a limited
company is void if it is not registered at companies house.

So you
cannot rely on that.



You can
only remove goods covered by retention of title clause if you can do so whereby
they can be simply unbolted from whatever they have been incorporated into.



If the
stock is already been sold when you're retention of title clause cannot enforce
an impossibility.



There
is another issue that is you have not reserve the right to enter into the
customer's premises to collect the goods and therefore even if they had not been
sold, they can say, yes, they are yours what you are not coming onto the
premises to get them.



Proceeds
of sale trust only works if the money is kept completely separate from any
other money which means in effect that they would have to put it into a
separate bank account.



What I
am asking is whether you told them that you had a retention of title clause but
they ignored you said and then went ahead and sold the stock anyway. I'm trying
to ascertain what stage, the stock was sold.



I
could let you have my dissertation which I have somewhere but it does make
rather heavy reading and it is over 4000 words.



This
link provides some excellent light reading although it might not seem like
lighter reading to you.



http://www.insitelawmagazine.com/saleretentionoftitle.htm



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