Protecting Your Inventory And Getting Paid

You've worked so hard to get your foot in the door with that prized retailer, striving mightily to please them. They've finally supported your line and you just shipped them a big order for Fall 2020. But that same retailer has now filed Chapter 11. What can you do to protect your inventory in the bankruptcy proceeding? Should you continue to do business with the retailer during the bankruptcy? And what can you do to avoid these problems in the future with other retailers? This article will briefly address these questions and provide some basic strategies to help guide the designer/manufacturer in these difficult times.

Getting Paid Before A Bankruptcy Petition Is Filed

Purchasing goods on a wholesale basis with a purchase order does not by itself afford protections for a designer/manufacturer. As discussed below, certain protections are afforded by the Uniform Commercial Code ("UCC"), which applies to the sales of goods, with respect to reclaiming goods. Before any