The controversial Personal Properties Securities Register has come up trumps, with the suppliers of a collapsed guitar store now able to get their property back following the closure of the business.
The collapse of Jackson’s Rare Guitars in Sydney late last year – an iconic store which has sold guitars to famous musicians such as George Harrison and Keith Urban – left 100 guitar sellers empty-handed after they had provided custom guitars to the store.
Under the new Personal Properties Security Registry laws, suppliers can only receive their property back if they registered beforehand. Many of the guitar makers were upset after being told they wouldn’t necessarily get the guitars back.
But now, in a statement, administrator Jamieson Louttit has said after receiving legal advice, all the guitars – which in total are valued at over $1 million – will be returned.
“It is the right thing to do and it is a good outcome for consignors who have been patient while I have been sorting out the PPS mess,” he said.
“The introduction of the new PPS Register has created chaos and could have left many consignors of the Rare Guitars with no rights to recover their goods.”
The importance of the registry lies in the fact suppliers that have registered their property will be treated as secured creditors in the event of a collapse.
But given the registry is so new, many suppliers don’t have much idea as to how it works, or even if they should be registered.
Late last year, insolvency expert Cliff Sanderson of Dissolve told SmartCompany it will take more time for suppliers to become aware of the register and how it works.
“I’ve always thought the PPSR is a good idea, but it guarantees the insolvency profession will become more complicated, and this is an example of that,” says Sanderson.
The return of the equipment is sure to set a precedent, although insolvency experts may be less willing to negotiate with suppliers in the future as the register becomes more common knowledge.
Jamieson Louttit said in a statement suppliers will be selling their gear on Grays Online, in “what is believed to be the biggest sale of rare guitars ever”.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
