PPS: the final countdown

With the commencement date fast approaching (on or about 10 October), it is time for businesses to ensure that they are ready for the introduction of the Personal Properties Securities Act 2009 (Cth) (PPSA). In particular, the PPSA will create new rules applicable to the supply of personal property on credit terms and to leases of goods which are not widely understood.

The new legislation fundamentally alters existing laws relating to priorities in respect of insolvent entities. In many cases, owners of goods supplied or leased to insolvent customers will need to take additional steps under the PPSA to perfect their interest in those goods. Failure to take these steps to appropriately protect security interests under the new laws may result in liquidators of insolvent customers seizing and disposing assets leased or supplied to the customers. Liquidators are generally unable to do this under laws currently in place.