The debtor you want to wind up may also be a critical supplier
Assess operational consequences where debtor is also critical supplier, separate from expected liquidation dividend.
Corporate Recovery Partners
01 / 06
The relationship may run in both directions
A company owes your business money, and you are considering winding-up proceedings. It also supplies a component or service your current jobs depend on. Tell your lawyer and operational team about both sides of the relationship. The recovery decision should account for unfinished supply and replacement arrangements as well as the debt, without assuming those commercial concerns decide the legal outcome.
Imagine a manufacturer owing a rebate while also producing specialist parts needed for your next installation. List accepted orders, deposits, expected deliveries and technical requirements. Identify what remains unfinished and what alternatives exist. Do not assume the factory will keep supplying on the same basis if circumstances change or an external administrator becomes involved.
ASIC explains that a liquidator takes control of the company's affairs and deals with its assets and liabilities. Ask your lawyer what the proposed process could mean for the actual contracts and claims. General guidance does not establish that an order will be fulfilled or cancelled. Avoid treating a prospective appointment as a controlled way to recover money while every other arrangement continues unchanged.
Obtain appropriate advice about substitute suppliers, technical approval and the time needed to secure capacity. In the specialist-parts example, a catalogue listing is not proof that another manufacturer can deliver the required items on schedule. Include deposits, transport and any redesign work in the commercial assessment. Do not place duplicate orders without reviewing the existing commitments.
Give advisers separate records of the amount owed to you and any amount you owe for supply. Ask about their legal interaction instead of assuming you can simply net everything off. Preserve security, ownership and contract questions for proper assessment. A useful decision file explains the complete trading relationship rather than presenting only the overdue receivable.
Discuss the legal merits, costs, recovery prospects and operational dependencies before giving instructions. Consider available alternatives with advice and keep urgent deadlines active. The goal is not to avoid every difficult recovery step. It is to understand whether the proposed action could also disrupt the work your business relies on, and what practical arrangements would be needed if that occurs.
