A supplier has stopped credit because of the case.
A supplier’s credit decision creates a new operating constraint. Recalculate delivery costs and communicate the case accurately while advisers handle the legal position.
Corporate Recovery Partners
01 / 06
The court case has changed the cost of completing jobs
A flooring supplier stops credit after seeing a customer company’s winding-up application. The company has installations booked and expected to pay for materials after customer receipts. The director wants to insist that credit continue because no liquidation order has been made. The immediate task is to assess the supply contract and whether the booked work remains funded.
Ask whether the supplier has suspended all orders, only new credit or specific unpaid deliveries. Obtain the reason and proposed conditions in writing. Check existing purchase terms and commitments with an adviser.
Do not assume the supplier must continue unchanged or that every restriction is valid. The contract and applicable law need review, particularly where existing orders are affected.
List materials needed, available stock, cash-on-delivery costs and realistic customer receipt dates. Identify which jobs can be completed and which require an agreed change.
Use the government cash-flow approach to compare payment timing. Replacing supplier credit with immediate cash can change a previously workable job into an unfunded commitment.
If discussing the case, use confirmed documents and the adviser-approved position. Do not promise the supplier that a hearing will end favourably or that another creditor has agreed something it has not.
Consider whether a limited order, deposit or revised schedule can be agreed, but assess any new security or personal guarantee before offering it.
Keep project staff informed about confirmed stock availability. Communicate realistic changes to customers through the appropriate contractual process.
Continue the company’s legal and solvency review. Restoring one supplier account would not establish that the company can meet every obligation or that the winding-up application is resolved.
