If a company enters insolvency, a supplier’s ability to recover their goods largely depends on whether there is a Retention of Title (ROT) clause in place. An ROT clause allows the supplier to retain ownership of the goods until full payment has been received. If such a clause exists and is enforceable, the supplier may be able to reclaim the goods.
What happens without an ROT clause
However, if no ROT clause exists, the goods become part of the insolvent company’s assets and may be sold to help repay debts. In this case, the supplier becomes an unsecured creditor—meaning they have no priority claim over the assets. As a result, it is unlikely they will recover either the goods or their full value, since unsecured creditors are generally paid last in the insolvency process.
