The personal property securities registration system has been with us for a while now however it may be something which most people have not properly considered.
The Age newspaper recently reported a matter where receivers have commenced an action in the Supreme Court of New South Wales against a leasing company in an attempt to gain control of four turbines valued at close to $50 million from APR Energy. If successful, these assets could be made available to the creditors of the Forge Group which was leasing the assets from APR, in what will be the largest case under the PPSA since its inception in 2012.
The decision by APR, not to register four gas turbines leased to Forge Group on the Personal Properties Security Register could potentially cost them $50 million.
Forge Group was placed into receivership on February 2014 when they were leasing four gas turbines from APR Energy. Assets not registered under the Personal Properties Security Act (PPSA) can vest with the lessee – in this case, Forge Group.
Given it costs less than $20 to register assets under the PPSA (excluding legal fees if required ), this oversight could be a costly error for APR.
Why you should register your assets on the PPSR
If you provide credit, supply, lease, hire or loan assets to third parties, you should obtain advice and register your interest in assets to protect your position. As shown above failing to register can be disasterous.