What steps should I take to recover money owed when a distributor enters administration?

When a distributor goes into administration, your recovery options depend heavily on whether you have retention of title clauses in your contract.

**If you have retention of title:** - Contact the appointed administrator as soon as they become available and raise your retention of title claim immediately - If you have general retention of title (rather than order-specific), you have broader scope to recover goods - Technically, you may be able to collect unpaid goods from the warehouse, though in practice administrators often restrict access - Any stock sold by the distributor after administration that remains unpaid goes into your claim if you can demonstrate you retain title - Gather lot numbers and batch information for all unpaid stock now, before the administrator takes control—this makes your claim easier to substantiate - Push hard to have any retro payments or marketing fees the distributor owes you contra'd against what they owe you for stock; otherwise you may pay full marketing costs but recover only pennies on the stock that generated them

**If you don't have retention of title:** - You must wait for the administration process to complete - Expect to recover only a small percentage ("pennies in the pound") as an unsecured creditor - Keep your debtor/creditor ledger clean and well-documented so administrators don't need to spend time wading through unclear records

**General preparation:** - Members recommend treating insolvency risk as an ongoing indicator of distributor health; early warning signs like sudden payment delays or stock sell-throughs should prompt review of your terms and exposure - Ensure your contracts include clear retention of title language going forward