I work at a factory that supplies product sold under the Diehard label and just yesterday I overheard sales guys fretting that not only might we not get paid outstanding debt, but that going in to bankruptcy they can bill us for whatever they paid in the previous 90 days. I don’t understand how that works, but they were having a serious discussion of the financial liabilities of continuing to supply Sears with product.
” I overheard sales guys fretting that not only might we not get paid outstanding debt, but that going in to bankruptcy they can bill us for whatever they paid in the previous 90 days.”
True if they extended credit to Sears because it’s called a preference—the bankrupt has paid one creditor but not another. So it’s a way to make all creditors get the same percentage of the money owed to them. If it’s cash on delivery, it’s not a preference.
They won’t need the batteries when they shut down the auto centers...