Bulk Transfers in District Of Columbia

Title 28. Commercial Instruments and Transactions. (Refs & Annos)
Subtitle I. Uniform Commercial Code. (Refs & Annos)
Article 6. Bulk Transfers. (Refs & Annos)
§ 28:6-101. Short title.
§ 28:6-102. Definitions and index of definitions.
§ 28:6-108. Bulk sales by auction; bulk sales conducted by liquidator.
 
Title 28. Commercial Instruments and Transactions. (Refs & Annos)
Subtitle I. Uniform Commercial Code. (Refs & Annos)
Article 6. Bulk Transfers. (Refs & Annos)
§ 28:6-101. Short title.
This article may be cited as the “Uniform Commercial Code -- Bulk Sales”.
 
Division V. Local Business Affairs
Title 28. Commercial Instruments and Transactions. (Refs & Annos)
Subtitle I. Uniform Commercial Code. (Refs & Annos)
Article 6. Bulk Transfers. (Refs & Annos)
§ 28:6-102. Definitions and index of definitions.
 (a) In this article, unless the context otherwise requires, the term:
(1) “Assets” means the inventory that is the subject of a bulk sale and any tangible and intangible personal property used or held for use primarily in, or arising from, the seller's business and sold in connection with that inventory, but the term does not include:
(A) Fixtures (§ 28:9-102(a)(41)) other than readily removable factory and office machines;
(B) The lessee's interest in a lease of real property; or
(C) Property to the extent it is generally exempt from creditor process under nonbankruptcy law.
(2) “Auctioneer” means a person whom the seller engages to direct, conduct, control, or be responsible for a sale by auction.
(3) “Bulk sale” means:
(A) In the case of a sale by auction or a sale or series of sales conducted by a liquidator on the seller's behalf, a sale or series of sales not in the ordinary course of the seller's business of more than half of the seller's inventory, as measured by value on the date of the bulk-sale agreement, if on that date the auctioneer or liquidator has notice, or after reasonable inquiry would have had notice, that the seller will not continue to operate the same or a similar kind of business after the sale or series of sales; and
(B) In all other cases, a sale not in the ordinary course of the seller's business of more than half the seller's inventory, as measured by value on the date of the bulk-sale agreement, if on that date the buyer has notice, or after reasonable inquiry would have had notice, that the seller will not continue to operate the same or a similar kind of business after the sale.
(4) “Claim” means a right to payment from the seller, whether or not the right is reduced to judgment, liquidated, fixed, matured, disputed, secured, legal, or equitable. The term includes costs of collection and attorney's fees only to the extent that the laws of the District permit the holder of the claim to recover them in an action against the obligor.
(5) “Claimant” means a person holding a claim incurred in the seller's business other than:
(A) An unsecured and unmatured claim for employment compensation and benefits, including commissions and vacation, severance, and sick-leave pay;
(B) A claim for injury to an individual or to property, or for breach of warranty, unless:
(i) A right of action for the claim has accrued;
(ii) The claim has been asserted against the seller; and
(iii) The seller knows the identity of the person asserting the claim and the basis upon which the person has asserted it; and
(C) A claim for taxes owing to a governmental unit, if:
(i) A statute governing the enforcement of the claim permits or requires notice of the bulk sale to be given to the governmental unit in a manner other than by compliance with the requirements of this article; and
(ii) Notice is given in accordance with the statute.
(6) “Creditor” means a claimant or other person holding a claim.
(7)(A) “Date of the bulk sale” means:
(i) If the sale is by auction or is conducted by a liquidator on the seller's behalf, the date on which more than 10% of the net proceeds is paid to or for the benefit of the seller; and
(ii) In all other cases, the later of the date on which:
(I) More than 10% of the net contract price is paid to or for the benefit of the seller; or
(II) More than 10% of the assets, as measured by value, are transferred to the buyer.
(B) For purposes of this subsection:
(i) Delivery of a negotiable instrument (§ 28:3-104(a)) to or for the benefit of the seller in exchange for assets constitutes payment of the contract price pro tanto;
(ii) To the extent that the contract price is deposited in an escrow, the contract price is paid to or for the benefit of the seller when the seller acquires the unconditional right to receive the deposit or when the deposit is delivered to the seller or for the benefit of the seller, whichever is earlier; and
(iii) An asset is transferred when a person holding an unsecured claim can no longer obtain through judicial proceedings rights to the asset that are superior to those of the buyer arising as a result of the bulk sale. A person holding an unsecured claim can obtain those superior rights to a tangible asset at least until the buyer has an unconditional right, under the bulk-sale agreement, to possess the asset, and a person holding an unsecured claim can obtain those superior rights to an intangible asset at least until the buyer has an unconditional right, under the bulk-sale agreement, to use the asset.
(8) “Date of the bulk-sale agreement” means:
(A) In the case of a sale by auction or conducted by a liquidator, the date on which the seller engages the auctioneer or liquidator; and
(B) In all other cases, the date on which a bulk-sale agreement becomes enforceable between the buyer and the seller.
(9) “Debt” means liability on a claim.
(10) “Liquidator” means a person who is regularly engaged in the business of disposing of assets for businesses contemplating liquidation or dissolution.
(11) “Mayor” means the Mayor of the District of Columbia.
(12) “Net contract price” means the new consideration the buyer is obligated to pay for the assets less:
(A) The amount of any proceeds of the sale of an asset, to the extent the proceeds are applied in partial or total satisfaction of a debt secured by the asset; and
(B) The amount of any debt to the extent it is secured by a security interest or lien that is enforceable against the asset before and after it has been sold to a buyer. If a debt is secured by an asset and other property of the seller, the amount of the debt secured by a security interest or lien that is enforceable against the asset is determined by multiplying the debt by a fraction, the numerator of which is the value of the new consideration for the asset on the date of the bulk sale and the denominator of which is the value of all property securing the debt on the date of the bulk sale.
(13) “Net proceeds” means the new consideration received for assets sold at a sale by auction or a sale conducted by a liquidator on the seller's behalf less:
(A) Commissions and reasonable expenses of the sale;
(B) The amount of any proceeds of the sale of an asset, to the extent the proceeds are applied in partial or total satisfaction of a debt secured by the asset; and
(C) The amount of any debt to the extent it is secured by a security interest or lien that is enforceable against the asset before and after it has been sold to a buyer. If a debt is secured by an asset and other property of the seller, the amount of the debt secured by a security interest or lien that is enforceable against the asset is determined by multiplying the debt by a fraction, the numerator of which is the value of the new consideration for the asset on the date of the bulk sale and the denominator of which is the value of all property securing the debt on the date of the bulk sale.
(14) A sale is “in the ordinary course of the seller's business” if the sale comports with usual or customary practices in the kind of business in which the seller is engaged or with the seller's own usual or customary practices.
(15) “United States” includes its territories and possessions and the Commonwealth of Puerto Rico.
(16) “Value” means fair market value.
(17) “Verified” means signed and sworn to or affirmed.
(b) The following definitions in other Articles apply to this article:
(1) “Buyer.” § 28:2-103(1)(a).
(2) “Equipment.” § 28:9-102(a)(33).
(3) “Inventory.” § 28:9-102(a)(48).
(4) “Sale.” § 28:2-106(1).
(5) “Seller.” § 28:2-103(1)(d).
(c) In addition, Article 1 contains general definitions and principles of construction and interpretation applicable throughout this article.
 
Division V. Local Business Affairs
Title 28. Commercial Instruments and Transactions. (Refs & Annos)
Subtitle I. Uniform Commercial Code. (Refs & Annos)
Article 6. Bulk Transfers. (Refs & Annos)
§ 28:6-108. Bulk sales by auction; bulk sales conducted by liquidator.
 (a) §§ 28:6-104, 28:6-105, 28:6-106, and 28:6-107 apply to a bulk sale by auction and a bulk sale conducted by a liquidator on the seller's behalf with the following modifications:
(1) “Buyer” refers to auctioneer or liquidator, as the case may be;
(2) “Net contract price” refers to net proceeds of the auction or net proceeds of the sale, as the case may be;
(3) The written notice required under § 28:6-105(c) must be accompanied by a copy of the schedule of distribution (§ 28:6-106(a)) and state at least:
(A) That the seller and the auctioneer or liquidator have entered into an agreement for auction or liquidation services that may constitute an agreement to make a bulk sale under the laws of the District of Columbia;
(B) The date of the agreement;
(C) The date on or after which the auction began or will begin or the date on or after which the liquidator began or will begin to sell assets on the seller's behalf;
(D) The date on or after which more than 10% of the net proceeds of the sale were or will be paid, if the date is not stated in the schedule of distribution;
(E) The name and a mailing address of the seller;
(F) Any other business name and address listed by the seller pursuant to § 28:6-104(a)(1);
(G) The name of the auctioneer or liquidator and an address of the auctioneer or liquidator from which information concerning the sale can be obtained;
(H) A statement indicating the type of assets or describing the assets item by item;
(I) The manner in which the auctioneer or liquidator will make available the list of claimants (§ 28:6-104(a)(6)), if applicable; and
(J) If the sale is in total or partial satisfaction of an antecedent debt owed by the seller, the amount of the debt to be satisfied and the name of the person to whom it is owed; and
(4) In a single bulk sale the cumulative liability of the auctioneer or liquidator for failure to comply with the requirements of this section may not exceed the amount of the net proceeds of the sale allocable to inventory and equipment sold less the amount of the portion of any part of the net proceeds paid to or applied for the benefit of a creditor which is allocable to the inventory and equipment.
(b) A payment made by the auctioneer or liquidator to a person to whom the auctioneer or liquidator is, or believes he or she is, liable under this section reduces pro tanto the auctioneer's or liquidator's cumulative liability under subsection (a)(4) of this section.
(c) A form substantially as follows is sufficient to comply with subsection (a)(3) of this section:
Notice of Sale
(1) __________, whose address is __________, is described in this notice as the “seller.”
(2) __________, whose address is __________, is described in this notice as the “auctioneer” or “liquidator.”
(3) The seller has disclosed to the auctioneer or liquidator that within the past 3 years the seller has used other business names, operated at other addresses, or both, as follows: __________.
(4) The seller and the auctioneer or liquidator have entered into an agreement dated __________ for auction or liquidation services that may constitute an agreement to make a bulk sale under the laws of the District of Columbia.
(5) The date on or after which the auction began or will begin or the date on or after which the liquidator began or will begin to sell assets on the seller's behalf is __________, and [if not stated in the schedule of distribution] the date on or after which more than 10% of the net proceeds of the sale were or will be paid is __________.
(6) The following assets are the subject of the sale:
.
(7) [If applicable] The auctioneer or liquidator will make available to claimants of the seller a list of the seller's claimants in the following manner:
.
(8) [If applicable] The sale is to satisfy $___ of an antecedent debt owed by the seller to __________.
(9) A copy of the schedule of distribution of the net proceeds accompanies this notice.
(d) A person who buys at a bulk sale by auction or conducted by a liquidator need not comply with the requirements of § 28:6-104(a) and is not liable for the failure of an auctioneer or liquidator to comply with the requirements of this section.
 
D.C. Code § § 28:6-101- 28:6-108