The Personal Property Securities Act has removed ownership as the overriding right in the event of insolvency. A person who merely “possesses or controls” an asset now has the same rights as an owner.
If a company is insolvent all assets in the possession or control of a company in financial distress are now treated as the assets of the company – regardless of who owns them including the actual owner – unless the owner’s rights have been registered with the PPSR.
Accordingly, whenever you give up possession or control of your assets, including for example hire businesses, leasing of plant and equipment or third party warehousing arrangements, you could, unless you now secure your interest by registration on the PPSR, be at risk of losing your assets, notwithstanding that you have retained legal title to those assets.
Possession is now 10/10ths of the law.
In order to guarantee the return of your assets you must register on the PPS Register or risk losing those assets and becoming an unsecured creditor.
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