Check the net sale proceeds and timing before promising money that is not yet available.
Corporate Recovery Partners
01 / 06
The machine has a buyer, but settlement needs cash
A business plans to fund a dispute settlement by selling a spare excavator. A buyer has expressed interest, but finance remains owing and collection has not been arranged. The settlement payment date is approaching. The expected sale price is not yet the amount or timing the business can confidently promise.
Start with a realistic sale amount, then identify finance payouts, selling expenses and other amounts that may reduce what remains. Ask the accountant about any relevant tax consequences.
Do not treat an advertised price or an informal offer as available funds. Keep assumptions visible, especially where a payout figure or buyer commitment is still missing.
Confirm who owns the asset and whether another party has rights affecting its sale. Review finance documents and obtain appropriate advice before agreeing delivery or release.
PPSR guidance explains that searches identify registered security interests and can reveal repossession risk. A search is useful evidence, but does not replace advice on the specific sale and any required discharge.
Compare the sale conditions, payment clearance and handover timing with the settlement obligation. Identify what happens if the buyer delays or the price changes.
Have your lawyer review any proposed condition tying settlement payment to the sale. Do not assume mentioning the sale during negotiation makes the payment obligation conditional.
Ask whether another funding source is genuinely available or whether revised settlement terms are needed. Assess its cost and impact before treating it as a backup.
If the sale cannot support the promise, raise the issue through the appropriate adviser before the due date. A new optimistic sale estimate is not a substitute for a workable plan.
