Economic Nuggets Impact Credit - Weekly ReviewNCS Credit - October 24, 2014
These are a few of the articles that caught our eye this week:
From Patterson Belknap Webb & Tyler LLP - Tough Choices Confront Trade Creditors When a Retailer Faces Bankruptcy
Even though the economy is improving, it is very important to continue to secure your receivables. Properly filed UCC Financing Statements put creditors in the best position to get paid, and UCCs may allow creditors to extend credit to marginal accounts.
“Trade creditors that supply struggling retailers face tough choices. Typically, trade creditors are aware that a retailer might file for bankruptcy protection, but do not know precisely when that may occur. Yet the filing date is important because, under the U.S. Bankruptcy Code, what trade creditors do both prepetition and post-petition can impact how they might fare in a retailer’s bankruptcy.”
Although this article was published prior to the passage of House Bill 473, it provides an overview of the Pennsylvania State Construction Notices Directory, which was modeled after the State Construction Registry for Utah.
“The stated purpose behind HB 473 is to protect commercial property owners from double paying to remove subcontractor liens. By registering the project, the owner can identify the universe of subcontractors working on the project and check to ensure that all subcontractors have been compensated before making final payment.”
Reviewing and monitoring the apparent credit worthiness of your customer is merely one facet of credit risk mitigation. It is imperative you also monitor industry data and trends and Reed Construction Data is a tremendous resource.
Rounding out this week is the NCS Blog Post about the myths of UCC filings. “Big Foot, a Unicorn & a UCC Financing Statement all walk into a credit conference….”
Big Foot, Unicorns & UCC filings all have one thing in common: crazy myths surrounding their existence and, in the case of the UCC filing, crazy myths about their effectiveness. While I’m not an expert on Big Foot and I think Unicorns are pretty, one thing I do know is the immense benefit UCC filings bring to your credit process. Today, I would like to dispel some of the age old myths about UCC filings.
Interested in our E-News Subscription? Sign up below!