A buyer signed an asset purchase agreement with a receiver that included the inventory on the schedule. Two suppliers served repossession demands the following fortnight.
Short answer
Yes — an unpaid supplier has a statutory right under the Bankruptcy and Insolvency Act to demand back its own goods from a purchaser, trustee or receiver, ahead of the receivership sale absorbing them into the buyer’s acquired assets, provided it acts inside a tight 15-day window and the goods were delivered within the 30 days before the insolvency and remain identifiable and unchanged.
BIA s.81.1(1) provides that if a supplier “has sold to another person (in this section referred to as the ‘purchaser’) goods for use in relation to the purchaser’s business and delivered the goods to the purchaser...and the purchaser has not fully paid for the goods, the supplier may have access to and repossess the goods at the supplier’s own expense, and the purchaser, trustee or receiver...shall release the goods, if (a) the supplier presents a written demand for repossession...within a period of 15 days after the day on which the purchaser became bankrupt or became a person who is subject to a receivership; (b) the goods were delivered within 30 days before the day on which the purchaser became bankrupt or became a person who is subject to a receivership.”
The right depends on the goods still being identifiable and, per the section’s own condition, “in the same state as they were on delivery” — inventory already blended into work-in-process is out of reach even if the timing conditions are met. And it is not the only claimant on the pile: s.81.2 gives farmers, fishermen and aquaculturists a broader charge over the WHOLE inventory rather than a right to specific goods, ranking behind an s.81.1 repossession but ahead of everything else — a materially different claim on the same assets bought from a receiver.
See it decided in the inventory-repossession case file and the inventory-method-changed file.
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