Code of the District of Columbia

Article 6. Bulk Transfers.


§ 28:6-101. Short title. [Repealed]

Repealed.


(Dec. 30, 1963, 77 Stat. 714, Pub. L. 88-243, § 1; Apr. 9, 1997, D.C. Law 11-239, § 2, 44 DCR 936; Oct. 23, 2014, D.C. Law 20-215, § 31, 61 DCR 13083.)

Prior Codifications

1981 Ed., § 28:6-101.

1973 Ed., § 28:6-101.

Editor's Notes

Applicability of D.C. Law 20-215: Section 32 of D.C. Law 20-215 provided that the act shall apply as of January 1, 2016.

Uniform Commercial Code Comment

Prior Uniform Statutory Provision:Section 6-101 (1987 Official Text).

Change: This Article applies only to sales, as defined in Section 2-103(1), and not to other transfers.

Purpose of Change: Transfers other than sales, e.g., grants of security interests, do not present risks to creditors necessitating advance notice in accordance with the provisions of this Article. The Uniform Fraudulent Transfer Act affords a remedy to creditors who are injured by donative transfers.

Rationale for Revision of the Article:

Article 6 (1987 Official Text) imposes upon transferees in bulk several duties toward creditors of the transferor. These duties include the duty to notify the creditors of the impending bulk transfer and, in those jurisdictions that have adopted optional Section 6-106, the duty to assure that the new consideration for the transfer is applied to pay debts of the transferor.

Compliance with the provisions of Article 6 can be burdensome, particularly when the transferor has a large number of creditors. When the transferor is actively engaged in business at a number of locations, assembling a current list of creditors may not be possible. Mailing a notice to each creditor may prove costly. When the goods that are the subject of the transfer are located in several jurisdictions, the transferor may be obligated to comply with Article 6 as enacted in each jurisdiction. The widespread enactment of nonuniform amendments makes compliance with Article 6 in multiple-state transactions problematic. Moreover, the Article requires compliance even when there is no reason to believe that the transferor is conducting a fraudulent transfer, e.g., when the transferor is scaling down the business but remaining available to creditors.

Article 6 imposes strict liability for noncompliance. Failure to comply with the provisions of the Article renders the transfer ineffective, even when the transferor has attempted compliance in good faith, and even when no creditor has been injured by the noncompliance. The potential liability for minor noncompliance may be high. If the transferor should enter bankruptcy before the expiration of the limitation period, Bankruptcy Code §§ 544(b), 550(a), 11 U.S.C. §§ 544(b), 550(a), may enable the transferor’s bankruptcy trustee to set aside the entire transaction and recover from the noncomplying transferee all the goods transferred or their value. The trustee has this power even though the noncompliance was with respect to only a single creditor holding a small claim.

The benefits that compliance affords to creditors do not justify the substantial burdens and risks that the Article imposes upon good faith purchasers of business assets. The Article requires that notice be sent only ten days before the transferee takes possession of the goods or pays for them, whichever happens first. Given the delay between sending the notice and its receipt, creditors have scant opportunity to avail themselves of a judicial or nonjudicial remedy before the transfer has been consummated.

In some cases Article 6 may have the unintended effect of injuring, rather than aiding, creditors of the transferor. Those transferees who recognize the burdens and risks that Article 6 imposes upon them sometimes agree to purchase only at a reduced price. Others refuse to purchase at all, leaving the creditors to realize only the liquidation value, rather than the going concern value, of the business goods.

As a response to these inadequacies and others, the National Conference of Commissioners on Uniform State Laws has completely revised Article 6. This revision is designed to reduce the burdens and risks imposed upon good-faith buyers of business assets while increasing the protection afforded to creditors. Among the major changes it makes are the following:

—this Article applies only when 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 ( Section 6-102(1)(c)).

—this Article does not apply to sales in which the value of the property otherwise available to creditors is less than $10,000 or those in which the value of the property is greater than $25,000,000 ( Section 6-103(3)(l)).

—the choice-of-law provision ( Sections 6-103(1)(b) and 6-103(2)) limits the applicable law to that of one jurisdiction.

—when the seller if indebted to a large number of persons, the buyer need neither obtain a list of those persons nor send individual notices to each person but instead may give notice by filing ( Sections 6-105(2) and 6-104(2)).

—the notice period is increased from 10 days to 45 days ( Section 6-105(5)), and the statute of limitations is extended from six months to one year ( Section 6-110).

—the notice must include a copy of a “schedule of distribution,” which sets forth how the net contract price is to be distributed ( Sections 6-105(3) and 6-106(1)).

—a buyer who makes a good faith effort to comply with the requirements of this Article or to exclude the sale from the application of this Article, or who acts on the good faith belief that this Article does not apply to the sale, is not liable for noncompliance ( Section 6-107(3)).

—a buyer’s noncompliance does not render the sale ineffective or otherwise affect the buyer’s title to the goods; rather, the liability of a noncomplying buyer is for damages caused by the noncompliance ( Sections 6-107(1) and 6-107(8)).

In addition to making these and other major substantive changes, revised Article 6 resolves the ambiguities that three decades of law practice, judicial construction, and scholarly inquiry have disclosed.


§ 28:6-102. Definitions and index of definitions. [Repealed]

Repealed.


(Dec. 30, 1963, 77 Stat. 714, Pub. L. 88-243, § 1; Feb. 7, 1980, D.C. Law 3-49, § 2, 26 DCR 2731; Apr. 9, 1997, D.C. Law 11-239, § 2, 44 DCR 936; Oct. 26, 2000, D.C. Law 13-201, § 201(g)(1), 47 DCR 7576; Oct. 23, 2014, D.C. Law 20-215, § 31, 61 DCR 13083.)

Prior Codifications

1981 Ed., § 28:6-102.

1973 Ed., § 28:6-102.

Section References

This section is referenced in § 28:6-104.

Effect of Amendments

D.C. Law 13-201, enacting a new Article 9 of the Uniform Commercial Code applicable July 1, 2001, made conforming amendments to this section applicable upon the same date.

Editor's Notes

Applicability of D.C. Law 20-215: Section 32 of D.C. Law 20-215 provided that the act shall apply as of January 1, 2016.

Uniform Commercial Code Comment

1. (a) “Assets”. New. The term generally includes only “personal property.” Whether particular property is “personal property“ is to be determined by law outside this Article; however, for purposes of this Article, (i) the term includes ‘’readily removable factory and office machines“ (compare Section 9-313(4)(c)), even if they are covered by applicable real estate law and thus are “fixtures” as defined in Section 9-313(1)(a); (ii) the term does not include the lessee’s interest in a lease of real property, even if that interest is considered to be personal property under other applicable law; and (iii) the term does not include property to the extent that it is “generally exempt from creditor process under nonbankruptcy law.”

(b) “Auctioneer”. Compare Section 6-108(3) (1987 Official Text).

(c) “Bulk Sale”. Bulk sales are of two kinds. Subsection (1)(c)(i) describes bulk sales conducted by a professional intermediary (i.e., an auctioneer or liquidator), as to which sales Section 6-108 applies. If these indirect sales occur as a series of related sales, then the entire series is treated as a single “bulk sale” and the term applies to the sales in the aggregate. Sales made directly by the seller to the buyer, described in subsection (1)(c)(ii), include sales conducted by an auctioneer or liquidator for its own account.

The elements of both direct and indirect sales are the same. Some of these elements have been borrowed from the 1987 Official Text of Article 6 and restated. For example, the term includes only sales that are not “in the ordinary course of the seller’s business“ (subsection (1)(m)). The sale must be of ”more than half of the seller’s inventory, as measured by value [subsection (1)(o)] on the date of the bulk-sale agreement [subsection (1)(h)].“ All inventory owned by the seller should be included in the calculation, regardless of where it is located. Inventory that is encumbered by a security interest or lien should be counted at its gross value, although the fact that it is encumbered may affect the applicability of this Article to the sale.

The determination whether a sale is a “bulk sale” and thus subject to this Article is not affected by whether other types of property are sold in connection with inventory. However, other provisions of this Article take account of the fact that other property may be sold in connection with inventory. For example, the availability of the exclusion in Section 6-103(3)(l) turns on the value of all the “assets,” not just the inventory. Similarly, the notice required by Section 6-105 must describe the “assets,” not just the inventory. And Section 6-107(4) measures the buyer’s maximum cumulative liability for noncompliance by the value of the inventory and equipment sold in the bulk sale.

In an effort to limit its coverage to sales posing the greatest risks to creditors, this Article adds an additional element to the definition of “bulk sale.” A sale is not a “bulk sale” unless the buyer, auctioneer, or liquidator has notice, or after a 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. Whether a person has “notice” depends upon what the person knows and what the person would have known had the person conducted a reasonable inquiry. The issue of whether a transaction was a bulk sale is likely to be litigated only when the seller has absconded with the sale proceeds. This Article requires that the matters as to which the buyer, auctioneer, or liquidator had notice be determined only by reference to facts that the person knew or would have known at the date of the bulk-sale agreement. Reference to what actually occurred is inappropriate.

Whether an inquiry is “reasonable” depends on the facts and circumstances of each case. These facts and circumstances may include the identities of the buyer and seller and the type of assets being sold. In some cases, a reasonable inquiry may consist of no inquiry at all concerning the seller’s future.

Not every change in business operations poses a substantial enough risk to creditors to justify the costs of compliance with this Article. Thus, in determining whether post-sale business is of a kind that is “the same” or “similar” to the business conducted before the sale, a court should consider whether, viewed from the perspective of the creditors of the seller, the change poses extraordinary risks or whether the change is a normal risk that creditors can be assumed to take. In particular, when the post-bulk sale business differs from the pre-bulk sale business only in the size of the business conducted, the seller should be considered to be continuing in the same or a similar kind of business and the sale should not be considered a bulk sale.

The seller must “continue to operate” the same or a similar kind of business as owner. If the owner sells the business assets to a buyer and continues to manage the business as an employee of the buyer, the seller is not continuing to operate the business within the meaning of this Article.

(d) “Claim”. New. The first sentence derives from Bankruptcy Code s 101(4), 11 U.S.C. § 101(4). Changes, including the deletion of Section 101(4)(B), were made for stylistic purposes only.

(e) “Claimant”. New. This term defines the category of claim holders who are the primary beneficiaries of the duties that this Article imposes. Compare “Creditor” (subsection (1)(f)).

States that choose not to afford taxing authorities the benefits of this Article should adopt Alternative A. Adoption of Alternative B would afford the benefits of this Article to taxing authorities except with respect to those taxes as to which there has been compliance with another statute requiring that notice of the bulk sale be given to the taxing authority.

(f) “Creditor”. New. The term includes all holders of claims against the seller, even holders of claims arising from consumer transactions. Compare “Claimant” (subsection (1)(e)).

(g) “Date of the bulk sale”. New. The parties are able to control the date of the bulk sale in several ways. They can keep the proceeds of the sale in escrow, thereby delaying the date of payment, or they can specifically agree that the assets remain subject to the reach of the seller’s creditors, thereby delaying the date that the assets are transferred. By adjusting the time that the buyer acquires an unconditional right to possess tangible assets and the time the buyer acquires an unconditional right to use intangible assets, the parties may affect the substantive rights of creditors and thereby control the date the assets are transferred.

The connection between the time of transfer and the buyer’s rights under the bulk-sale agreement appears only for purposes of sales to which this Article applies. Subsection (1)(g) does not purport to affect the rights of creditors of a seller of property for other purposes or under other circumstances.

(h) “Date of the bulk-sale agreement”. New. Law outside this Article, including the provisions of Article 2, determines when an agreement for a bulk sale becomes enforceable between the buyer and the seller and when an auctioneer or liquidator is engaged.

(i) “Debt”. New. This subsection is borrowed from Bankruptcy Code Section 101(11).

(j) “Liquidator”. New. Although the definition of “liquidator” is quite broad, the term is used with respect to sales that are “conducted” by a liquidator on behalf of the seller. See subsection (1)(c)(i). Thus only those liquidators that “conduct” sales will be affected by this Article.

(k) “Net contract price”. New. Consideration is not “new consideration” to the extent that it consists of the partial or total satisfaction of an antecedent debt owed to the buyer by the seller. When the buyer buys assets along with property other than assets, the “net contract price” is that portion of the new consideration allocable to the assets.

(l) “Net proceeds”. New. The term appears, without definition, in Section 6-108 (1987 Official Text).

(m) “In the ordinary course of the seller’s business”. New.

(n) “United States”. New. This subsection derives from Section 9-103(3)(c).

(o) “Value”. New. The definition in Section 1-201(44) is not appropriate in the context of this Article.

(p) “Verified”. New.

Cross-References: 2. “Good faith”. This Article adopts the definition of “good faith” in Article 1 in all cases, even when the buyer is a merchant.

Cross-References: Point 1(a): Section 9-313.

Point 1(c): Sections 1-201 and 6-103.

Point 1(g): Article 2 generally.

Point 1(h): Section 2-201 and Article 2 generally.


§ 28:6-103. Applicability of article. [Repealed]


(Dec. 30, 1963, 77 Stat. 714, Pub. L. 88-243, § 1; Apr. 9, 1997, D.C. Law 11-239, § 2, 44 DCR 936; Oct. 26, 2000, D.C. Law 13-201, § 201(g)(2), 47 DCR 7576; Oct. 23, 2014, D.C. Law 20-215, § 31, 61 DCR 13083.)

Prior Codifications

1981 Ed., § 28:6-103.

1973 Ed., § 28:6-103.

Section References

This section is referenced in § 28:6-107.

Effect of Amendments

D.C. Law 13-201, enacting a new Article 9 of the Uniform Commercial Code applicable July 1, 2001, made conforming amendments to this section applicable upon the same date.

Editor's Notes

Applicability of D.C. Law 20-215: Section 32 of D.C. Law 20-215 provided that the act shall apply as of January 1, 2016.

Uniform Commercial Code Comment

Prior Uniform Statutory Provision:Sections 6-102 and 6-103 (1987 Official Text).

Changes: New choice-of-law provision; exclusions from the Article clarified, revised, and expanded.

Purposes of Changes and New Matter: 1. Subsection (1)(a) follows Section 6-102(3) of the 1987 Official Text and makes Article 6 applicable only when the seller’s principal business is the sale of inventory from stock. This Article does not apply to a sale by a seller whose principal business is the sale of goods other than inventory, e.g., a farmer, is the sale of inventory not from stock, e.g., a manufacturer who produces goods to order, or is the sale of services, e.g., a dry cleaner, barber, or operator of a hotel, tavern, or restaurant.

2. The choice-of-law rule in subsections (1)(b) and (2) derives from Section 9-103(3) and should be interpreted consistently with the Official Comment and case law construing that Section. Any agreement between the buyer and the seller with regard to the law governing a bulk sale does not affect the choice-of-law rule in this Article.

3. Some of the transactions excluded by subsection (3), e.g., those excluded by subsection (3)(a), may not be bulk sales. This Article nevertheless specifically excludes them in order to allay any doubts about the Article’s applicability. Certain transactions, e.g., the sale of fully encumbered inventory that remains subject to a security interest, may be excluded by more than one subsection.

4. Subsections (3)(a), (b), (c), (d), and (e) derive from subsections (1) and (3) of Section 6-103 (1987 Official Text).

5. Subsections (3)(f), (g), and (h) restate subsections (2), (4), and (5) of Section 6-103 with minor changes.

6. Subsections (3)(i), (j), and (k) relate to sales in which the buyer assumes specified debts of the seller. A bulk sale does not fall within any of these subsections unless the buyer’s assumption of debts is binding and irrevocable.

Subsection (3)(j) derives from subsection (6) of Section 6-103 (1987 Official Text) and is available to buyers who are not insolvent (as defined in Section 1-201(23)), assume all the seller’s business debts in full, and give notice of the assumption. Subsection (3)(k) derives from subsection (7) of Section 6-103 (1987 Official Text) and excludes transactions in which the risks to creditors are minimal. Like subsection (3)(j), this subsection applies only if the buyer assumes all the seller’s business debts in full and gives notice of the assumption. In addition, the buyer must be a new organization that is organized to take over and continue the seller’s business, the seller must receive nothing from the sale other than an interest in the new organization, and the seller’s interest must be subordinate to the claims arising from the assumption. Sales that may qualify for the exclusion include the incorporation of a partnership or sole proprietorship.

Buyers often are reluctant to assume debts of which they have no knowledge. Subsection (3)(i), which is new, permits a qualifying buyer to exclude a sale from this Article by assuming only those debts owed to claimants of whom the buyer has knowledge after the buyer either conducts a reasonable inquiry to discover claimants or obtains a list of claimants from the seller. A buyer who takes a verified list from the seller is held to have knowledge of the claimants on the list and is entitled to rely in good faith on the list without making further inquiry. The protection afforded by the assumption of these debts, while not perfect, is sufficiently great to eliminate the need for compliance with Article 6.

7. Subsection (3)(l) is new. Although the bulk sale of even a very small business may be of concern to some creditors, losses to creditors from sales of assets in which the seller’s equity is less than $10,000 are not likely to justify the costs of complying with this Article. Sales of assets having a value of more than $25,000,000 have not presented serious risks to creditors. Publicity normally attends sales of that magnitude, and the sellers are unlikely to be able successfully to remove the proceeds from the reach of creditors. As used in this subsection, “price” includes all consideration for the assets, not only new consideration. Compare “Net contract price” ( Section 6-102(1)(k)). If the auctioneer or liquidator does not make an estimation, then no presumption arises.

8. Subsection (3)(m) is new. This Article assumes that creditors are aware of statutes that may require their debtors to conduct bulk sales under specified circumstances, e.g., upon the termination of a franchise or of a contract between a dealer and supplier, and are able to take account of any risk that those sales may impose.

Cross-References: Point 1: Section 9-109.

Point 2: Sections 1-105 and 9-103.

Point 3: Section 6-102.

Point 4: Sections 9-111, 9-503, 9-504, and 9-505.

Point 6: Sections 1-201 and 1-203.

Point 7: Section 6-102.

Definitional Cross-References: “Asset”. Section 6-102.

“Auctioneer”. Section 6-102.

“Bulk sale”. Section 6-102.

“Buyer”. Section 2-103.

“Claimant”. Section 6-102.

“Collateral”. Section 9-105.

“Date of the bulk sale”. Section 6-102.

“Date of the bulk-sale agreement”. Section 6-102.

“Debt”. Section 6-102.

“Insolvent”. Section 1-201.

“Inventory”. Section 9-109.

“Knowledge”. Section 1-201.

“Liquidator”. Section 6-102.

“Net contract price”. Section 6-102.

“Notice”. Section 1-201.

“Organization”. Section 1-201.

“Presumed”. Section 1-201.

“Proceeds”. Section 9-306.

“Sale”. Section 2-106.

“Secured party”. Section 9-105.

“Security interest”. Section 1-201.

“Seller”. Section 2-103.

“Send”. Section 1-201.

“United States”. Section 6-102.

“Value”. Section 6-102.

“Verified”. Section 6-102.


§ 28:6-104. Obligations of buyer. [Repealed]

Repealed.


(Dec. 30, 1963, 77 Stat. 715, Pub. L. 88-243, § 1; Apr. 9, 1997, D.C. Law 11-239, § 2, 44 DCR 936; Oct. 23, 2014, D.C. Law 20-215, § 31, 61 DCR 13083.)

Prior Codifications

1981 Ed., § 28:6-104.

1973 Ed., § 28:6-104.

Section References

This section is referenced in § 28:6-105, § 28:6-107, § 28:6-108, and § 47-4461.

Editor's Notes

Applicability of D.C. Law 20-215: Section 32 of D.C. Law 20-215 provided that the act shall apply as of January 1, 2016.

Uniform Commercial Code Comment

Prior Uniform Statutory Provision:Section 6-104 (1987 Official Text).

Changes: Revised and rewritten.

Purposes of Changes and New Matter: 1. Subsection (1) sets forth the buyer’s duties in a bulk sale conducted by the seller. The buyer’s failure to perform these duties may result in liability under Section 6-107. An auctioneer in a bulk sale by auction and a liquidator in a bulk sale that the liquidator conducts on the seller’s behalf have similar duties but may face somewhat different liability. See Section 6-108(1). The buyer’s duties are designed to afford the seller’s claimants the opportunity to learn of the bulk sale before the seller has removed the assets from their reach and has received payment that is easily secreted.

2. Section 6-104(3) (1987 Official Text) provides that “[r]esponsibility for the completeness and accuracy of the list of creditors rests on the transferor, and the transfer is not rendered ineffective by errors or omissions therein unless the transferee is shown to have had knowledge.“ This sentence has been deleted as superfluous. Nothing in this Article suggests that the buyer is responsible for the completeness or accuracy of the list of claimants. The buyer’s only obligations with respect to the list are to obtain it from the seller and to make it available. A buyer who sends or delivers notice of the bulk sale in accordance with Section 6-105(1) may rely in good faith on the list supplied by the seller unless, at the time the notice is sent or delivered, the buyer has knowledge of a claimant not on the list. A buyer who knows of a claimant not on the list is obligated to send notice of the bulk sale to that claimant.

3. The buyer’s only obligation with respect to the net contract price is to comply with the schedule of distribution. The schedule may provide for the buyer to pay the entire net contract price to the seller. If so, the buyer complies with the requirements of Section 6-104(1)(e) by paying the entire net contract price to the seller.

4. The purpose of the list of claimants is to enable the buyer to give claimants notice of the bulk sale. If the buyer gives notice by filing in a public office ( Section 6-105(2)), then the buyer need not obtain or preserve a list of the seller’s claimants.

Cross-References: Point 1: Sections 6-107 and 6-108.

Point 2: Sections 6-105 and 1-203.

Point 3: Section 6-106.

Point 4: Section 6-105.

Definitional Cross-References: “Buyer”. Section 2-103.

“Bulk sale”. Section 6-102.

“Claimant”. Section 6-102.

“Date of the bulk sale”. Section 6-102.

“Net contract price”. Section 6-102.

“Notice”. Section 1-201.

“Seller”. Section 2-103.

“Verified”. Section 6-102.


§ 28:6-105. Notice to claimants. [Repealed]

Repealed.


(Dec. 30, 1963, 77 Stat. 715, Pub. L. 88-243, § 1; Apr. 9, 1997, D.C. Law 11-239, § 2, 44 DCR 936; Oct. 23, 2014, D.C. Law 20-215, § 31, 61 DCR 13083.)

Prior Codifications

1981 Ed., § 28:6-105.

1973 Ed., § 28:6-105.

Section References

This section is referenced in § 28:6-104, § 28:6-106, and § 28:6-108.

Editor's Notes

Applicability of D.C. Law 20-215: Section 32 of D.C. Law 20-215 provided that the act shall apply as of January 1, 2016.

Uniform Commercial Code Comment

Prior Uniform Statutory Provision:Sections 6-105 and 6-107 (1987 Official Text).

Changes: Revised, alternative method of giving notice added, and form of notice added.

Purposes of Changes and New Matter: 1. Subsection (1) sets forth the method by which the buyer may discharge the duty to notify the seller’s claimants of the impending sale. The buyer “has knowledge” of a claimant only if the buyer has actual knowledge sufficient to enable the buyer to send a notice to the claimant. A buyer who knows only that the seller has other, unidentified claimants complies with this subsection by giving notice to the claimants on the seller’s list.

2. Subsection (2) is new. It affords the buyer the opportunity to publish notice in cases in which the number of claimants—and thus the costs of compliance and risk of inadvertent noncompliance—are large. Although a filed notice will not inform every claimant of the impending sale, a filed notice is expected to inform a sufficient number of claimants (perhaps through credit reporting services) to enable them to stop an unfair or fraudulent transaction before it occurs.

The buyer may give notice by filing if the seller actually has 200 or more claimants or if the buyer receives a verified statement that the seller has 200 or more claimants. Claimants who hold secured or matured claims for employment compensation and benefits are not counted in determining the number of claimants for this purpose; however, they are entitled to receive notice of the bulk sale.

The duty to give notice must be performed in good faith. A buyer who receives a verified statement from the seller but knows the statement to be false does not act in good faith and thus does not comply with subsection (2)(b).

3. Subsection (3) prescribes the contents of the notice. The contents are the same regardless of whether notice is sent to each claimant or filed, except that the information in subsection (3)(i) is required only when notice is sent. The requirements of subsection (3) are the minimum; a notice that includes additional information is effective. The requirement in subsection (3)(h) for the description of assets is modeled on Section 9-402(1). Neither the identification of assets by serial number nor an item-by-item list of assets is required.

Subsection (3)(j) applies when the sale satisfies a debt owed by the seller to the buyer or to a third party. Section 6-103(3) excludes certain sales of this kind from the application of this Article.

4. Subsection (4) requires that a notice give the proper name of the seller and the buyer. A trade name is insufficient. See Official Comment 7 to UCC s 9-402. However, subsection (3)(f) requires that trade names be added when the seller has provided them to the buyer. The list need not include trade names or other names that the seller has used but not listed, even if the buyer knows of the names.

5. Subsection (5) requires that notice be given not less than 45 days before the date of the bulk sale. The period was extended from the 10 days afforded by the 1987 Official Text to provide ample time for claimants to receive or discover the notice and to take any action that the law permits to collect their claims from the seller. For example, depending upon the facts of each case and upon applicable law, claimants might seek to enjoin the sale, acquire a judicial lien on the assets or the proceeds, threaten to refuse to deal with the buyer unless the seller’s debt is paid, or file an involuntary bankruptcy petition against the seller. The “date of the bulk sale” is defined in such a way as to permit the seller to transfer the assets to the buyer or the buyer to pay the price to the seller (but not both) before or during the 45 days.

6. Subsection (6) derives from Section 9-402(8). The purpose of filing is to give notice to claimants. Whether an error in the seller’s name is seriously misleading should depend upon whether a claimant searching under the seller’s correct name could have found the filing. Whether an error other than in the seller’s name is seriously misleading should depend upon whether the error prejudiced the ability of claimants to assert their rights.

Cross-References: Point 1: Sections 1-201 and 6-104.

Point 2: Sections 1-203 and 6-104.

Point 3: Sections 6-102, 6-104, and 9-402.

Point 4: Sections 6-104 and 9-402.

Point 5: Section 6-102.

Point 6: Sections 6-107 and 9-402.

Definitional Cross-References: “Asset”. Section 6-102.

“Bulk sale”. Section 6-102.

“Buyer”. Section 2-103.

“Claim”. Section 6-102.

“Claimant”. Section 6-102.

“Date of the bulk sale”. Section 6-102.

“Date of the bulk-sale agreement”. Section 6-102.

“Debt”. Section 6-102.

“Knowledge”. Section 1-201.

“Net contract price”. Section 6-102.

“Seller”. Section 2-103.

“Send”. Section 1-201.

“Verified”. Section 6-102.

“Written”. Section 1-201.


§ 28:6-106. Schedule of distribution. [Repealed]

Repealed.


(Apr. 9, 1997, D.C. Law 11-239, § 2, 44 DCR 936; Oct. 23, 2014, D.C. Law 20-215, § 31, 61 DCR 13083.)

Prior Codifications

1981 Ed., § 28:6-106.

Section References

This section is referenced in § 28:6-104, § 28:6-105, and § 28:6-108.

Editor's Notes

Applicability of D.C. Law 20-215: Section 32 of D.C. Law 20-215 provided that the act shall apply as of January 1, 2016.

Uniform Commercial Code Comment

Prior Uniform Statutory Provision: None.

Purposes: 1. A principal purpose of bulk sales legislation has been to impair the ability of a seller to liquidate inventory and abscond with the proceeds, leaving creditors unpaid. Toward this end, a significant minority of jurisdictions adopted optional Section 6-106 (1987 Official Text), which imposes upon a transferee in bulk the duty to apply the new consideration for the transfer to the debts of the transferor pro rata. When one or more of these debts is unliquidated, disputed, or allegedly secured, making a pro rata distribution may prove quite difficult and distribution of the consideration may be delayed considerably. In addition, since preferences generally are permitted under state law, the appropriateness of mandating a pro rata distribution is questionable. Accordingly, this Article does not require the buyer to apply the consideration to payment of the seller’s debts.

This Article recognizes, however, that the seller’s claimants have an interest in learning what will happen to the net contract price. If the contemplated distribution is objectionable, claimants should be able to avail themselves of whatever remedies state law or federal law allows to prevent the sale or tie up the price. On the other hand, if the price is to be distributed in a manner that is favorable to creditors, then advance knowledge of that fact will facilitate the sale by obviating any need for claimants to interfere with it.

To afford advance notice of the intended distribution of the contract price, Section 6-105(3) requires the buyer to include with the notice of the sale a copy of the “schedule of distribution”—i.e., of the agreement between the buyer and the seller on how the net contract price is to be distributed.

2. This Article does not require the net contract price to be applied in any particular fashion. Rather, the buyer and the seller may agree to whatever they wish. They must, however, disclose their agreement in ample time before the date of the bulk sale. See Section 6-105(5). The terms of the schedule of distribution in any given sale will be a function of the negotiations between buyer and seller as affected by any applicable non-Code law (e.g., corporate dissolution statutes) imposing distribution requirements in sales of the kind conducted.

In formulating the schedule, the parties may be well advised to consider the likely reaction of claimants to the schedule. For example, a schedule that contemplates the distribution of the entire net contract price to the seller or to a single creditor may prompt the filing of an involuntary bankruptcy petition. A schedule that contemplates paying the net contract price into an escrow established for the benefit of the seller’s claimants may be more favorably received.

The seller may incur additional debt between the time the schedule is published and the time the net contract price is paid. The schedule may provide for payment of those debts from the net contract price.

3. Unless otherwise agreed, the buyer’s only liability to creditors for failure to comply with his undertakings in the schedule of distribution is set forth in Section 6-107(1). A creditor named in the schedule may not rely on the creation or publication of the schedule as the basis for imposing liability against the buyer on any other theory, including that of estoppel or third-party beneficiary.

The seller may wish to undertake to pay some of the price to creditors. The seller may, but need not, include this undertaking in the schedule of distribution. The buyer is not responsible for performance of the seller’s undertakings. Thus, if the seller makes an undertaking with respect to payment of the net contract price and fails to perform in accordance with it, the buyer faces no liability. However, certain persons in control of the seller may be liable under those circumstances. See Section 6-107(11).

4. In some cases, the precise amount of the net contract price may be unknown at the time that the schedule of distribution is formulated and notice of the bulk sale is given. In other cases, the net contract price may prove to be less than originally anticipated. Parties who fail to provide for these contingencies in the schedule of distribution and are unable to abide by the original schedule may be required to give a new notice with a new schedule.

The inability to abide by the schedule may be due to an external legal event, e.g., the suffering of a garnishment lien on the net contract price, the filing of a bankruptcy petition, or compliance with a corporate dissolution statute. If so, subsection (4), which applies to the extent that the net contract price is within the control of the buyer, may afford relief to the buyer, and subsection (6), which applies to the extent the net contract prices is within the control of the seller, may afford relief to a person in control of the seller. Although this Article imposes no obligation on sellers with respect to distribution of the net contract price (or otherwise), a seller may incur an obligation of this kind by agreement with the buyer. Accordingly, subsection (6) provides the means by which the seller as well as a person in control of the seller may be excused from any such obligation.

Subsections (4)(a) and (6)(a) permit the buyer or seller respectively to distribute the net contract price remaining available in accordance with any priorities for payment. A schedule need not afford priority to particular debts. If the schedule contains no priorities, then the debts are treated as if they are all of the same priority, and the buyer or seller, as the case may be, may distribute the price pro rata in partial satisfaction of the debts set forth in the schedule. Law other than this Article determines whether a court order or a proceeding for interpleader is available for purposes of subsections (4)(b), (4)(c), (6)(b), and (6)(c).

Cross-References: Point 1: Sections 6-104 and 6-105.

Point 2: Section 6-105.

Point 3: Sections 1-102 and 6-107.

Definitional Cross-References: “Buyer”. Section 2-103.

“Contract”. Section 1-201.

“Creditor”. Section 1-201.

“Debt”. Section 6-102.

“Net contract price”. Section 6-102.

“Person”. Section 1-201.

“Seller”. Section 2-103.

“Written”. Section 1-201.


§ 28:6-107. Liability for noncompliance. [Repealed]

Repealed.


(Apr. 9, 1997, D.C. Law 11-239, § 2, 44 DCR 936; Oct. 23, 2014, D.C. Law 20-215, § 31, 61 DCR 13083.)

Prior Codifications

1981 Ed., § 28:6-107.

1973 Ed., § 28:6-107.

Section References

This section is referenced in § 28:6-106, § 28:6-108, and § 28:6-110.

Editor's Notes

Applicability of D.C. Law 20-215: Section 32 of D.C. Law 20-215 provided that the act shall apply as of January 1, 2016.

Uniform Commercial Code Comment

Prior Uniform Statutory Provision: None.

Purposes: 1. This section sets forth the consequences of noncompliance with the requirements of Section 6-104. Although other legal consequences may result from a bulk sale—e.g., the buyer may be liable to the seller under Article 2 or to the seller’s creditors under the Uniform Fraudulent Transfer Act—no other consequences may be imposed by reason of the buyer’s failure to comply with the requirements of this Article.

The two subsections of Section 6-107(1) reflect the duties set forth in Section 6-104. The duties generally run only to claimants, but the duty to distribute the net contract price in accordance with the schedule of distribution ( Section 6-104(1)(e)) may run also to certain creditors.

2. Article 6 (1987 Official Text), like many of its nonuniform predecessors, makes a noncomplying transfer ineffective against aggrieved creditors. In contrast, noncompliance with this Article neither renders the sale ineffective nor otherwise affects the buyer’s rights in or title to the assets.

Liability under this Article is for breach of a statutory duty. The buyer’s only liability is personal (in personam) liability. Aggrieved creditors may only recover money damages. In rem remedies, which are available upon noncompliance with Article 6 (1987 Official Text), are not available under this Article. Thus, aggrieved creditors no longer may treat the sale as if it had not occurred and use the judicial process to apply assets purchased by the buyer toward the satisfaction of their claims against the seller.

The change in the theory of liability and in the available remedy should be of particular significance if the seller enters bankruptcy after the sale is consummated. When an aggrieved creditor of the transferor has a nonbankruptcy right to avoid a transfer in whole or in part, as may be the case under Article 6 (1987 Official Text), the transferor’s bankruptcy trustee may avoid the entire transfer. See Bankruptcy Code s 544(b), 11 U.S.C. § 544(b). Under this Article, a person who is aggrieved by the buyer’s noncompliance may not avoid the sale. Rather, the person is entitled only to recover damages as provided in this section. Because no creditor has the right to avoid the transaction or to assert a remedy that is the functional equivalent of avoidance, the seller’s bankruptcy trustee likewise should be unable to do so.

3. This Article makes explicit what is implicit in Article 6 (1987 Official Text): only those persons as to whom there has been noncompliance are entitled to a remedy. For example, if notices are sent to each claimant other than claimant A, claimant B cannot recover. Similarly, a creditor who acquires a claim after notice is given has no remedy unless the buyer undertakes in the schedule of distribution to pay that creditor and the buyer fails to meet the obligation.

4. Unlike Article 6 (1987 Official Text), which imposes strict liability upon a noncomplying transferee, this Article imposes liability for noncompliance only when the failure to comply actually has injured a creditor and only to the extent of the injury. Each creditor’s damages are measured by the injury that the particular creditor sustained as a consequence of the buyer’s failure to comply. This measure is stated as the amount of the debt reduced by any amount that the person would not have realized if the buyer had complied. Compare Section 4-103(5).

5. A buyer is liable only for the buyer’s own noncompliance with the requirements of Section 6-104. Under that section, the only step the buyer must take to discover the identity of the seller’s claimants is to obtain a list of claimants from the seller. If the seller’s list is incomplete and the buyer lacks knowledge of claimant C, then claimant C has no remedy under subsection (1)(b) of this section.

6. The creditor has the burden of establishing the validity and amount of the debt owed by the seller as well as the fact of the buyer’s noncompliance. In contesting the allegation of noncompliance, the buyer may introduce evidence tending to show either that the sale was not a bulk sale or that the sale was a bulk sale to which this Article does not apply. In contesting the validity and amount of the debt, the buyer may introduce evidence tending to show that the seller had a defense to the debt. The buyer has the burden of establishing the amount that the creditor would not have realized even if the buyer had complied. Implicit in subsection (2) is that certain failures to comply with the requirements of this Article will cause no injury and thus result in no liability.

The following examples illustrate the operation of subsection (2):

Example 1: The buyer fails to give notice of the bulk sale. Claimant D, who appears on seller’s list of claimants, admits to having had actual knowledge of the impending sale two months before it occurred. The buyer is likely to be able to meet the burden of establishing that even had the buyer given notice of the sale, claimant D would not have recovered any more than the claimant actually recovered.

Example 2: The buyer failed to obtain a list of seller’s business names ( Section 6-104(1)(a)) or to make available the list of claimants. ( Section 6-104(1)(f)). In many cases, the buyer may be able to meet the burden of establishing that compliance with those subsections would not have enabled claimants to recover any more than they actually recovered.

7. Subsection (3) may afford a complete defense to a noncomplying buyer. This defense is available to buyers who establish that they made a good faith effort to comply with the requirements of this Article or made a good faith effort to exclude the sale from the application of this Article (e.g., by assuming debts and attempting to comply with the notice requirements of Section 6-103(3)(i), (j), or (k)). When a buyer makes a good faith effort to comply with this Article or to exclude the transaction from its coverage, the injury caused by noncompliance is likely to be de minimis. In any event, the primary responsibility for satisfying claims rests with the creditors, and this Article imposes no greater duty upon buyers who attempt to comply with this Article or to exclude a sale from its application than to make a good faith effort to do so.

The defense of subsection (3) also is available to buyers who act on the good faith belief that this Article does not apply to the sale (e.g., because the sale is not a bulk sale or is excluded under Section 6-103). The good-faith-belief defense is an acknowledgement that reasonable people may disagree over whether a given transaction is or is not a bulk sale and over whether Section 6-103 excludes a particular transaction. A buyer acting in good faith should be protected from the liability that this Article otherwise would impose on buyers who may be completely innocent of wrongdoing. A buyer who is unaware of the requirements of this Article holds no belief concerning the applicability of the Article and so may not use the defense.

8. Even a buyer who completely fails to comply with this Article may not be liable in an amount equal to sum of the seller’s debts. Subsection (4) limits the aggregate recovery for “any one bulk sale,” which term includes a series of sales by a liquidator. The maximum cumulative liability for noncompliance with this Article parallels the maximum recovery generally available to creditors under the 1987 Official Text of Article 6. Under that Article, the noncomplying transferee may have to “pay twice“ for the goods. First, the transferee may pay the purchase price to the transferor; then, the transferee may lose the goods to aggrieved creditors.

Under this Article, the maximum cumulative liability is an amount equal to twice the net contract price of the inventory and equipment (i.e., twice the amount that would be available to unsecured creditors from the inventory and equipment), less the amount of any portion of that net contract price paid to or applied for the benefit of the seller or a creditor of the seller. Unless the buyer receives credit for amounts paid to the seller (which amounts the creditors have a right to apply to payment of their claims), the buyer might wind up paying an amount equal to the net contract price three times (once to the seller and twice to aggrieved creditors). The grant of credit for amounts paid to the seller’s creditors recognizes that ordinarily the seller has no obligation to pay creditors pro rata.

When the assets sold consist of only inventory and equipment, calculation of the maximum cumulative liability is relatively simple. But when the assets sold include property in addition to inventory and equipment, the calculation becomes more difficult. When inventory or equipment secures a debt that also is secured by other collateral and the aggregate value of the collateral exceeds the secured debt, a determination of the amount in clause (ii) of subsection (5) may require an allocation of the collateral to the debt in accordance with the statutory formula. In addition, one may need to determine which portion of payments of the net contract price is allocable to inventory and equipment. Subsection (5) directs that this allocation be made by multiplying the part of the net contract price paid to or applied for the benefit of the seller or a creditor by a fraction whose nominator is the net value of the inventory and equipment and whose denominator is the net value of all the assets.

Sometimes the seller may receive the net contract price and pay some or all of it to one or more creditors. In determining whether a payment to a creditor was made from the net contract price or from another source, courts are free to employ tracing rules. Amounts paid to secured parties usually are taken into account in determining the net contract price; if so, the buyer should not receive credit for them.

9. The buyer need not wait for judgment to be entered before paying a person believed to be a creditor of the seller. Indeed, the buyer is entitled to credit for amounts paid to persons who in fact may not be creditors of the seller, as long as the buyer acts with the belief that the seller is so indebted. As is the case with respect to all obligations under the Code, the buyer’s belief must be held in good faith.

10. Any amounts paid by the buyer in satisfaction of the liability created by Section 6-107(1) reduce the seller’s liability to the recipient pro tanto. Consequently, the buyer is entitled to immediate reimbursement of those amounts from the seller. The right of reimbursement is available only for amounts paid to actual creditors. Amounts paid to those whom the buyer incorrectly believes to be creditors ordinarily are not recoverable from the seller, although the buyer is entitled to credit for those amounts against the aggregate liability in subsection (4). Of course, the buyer and seller may vary the seller’s reimbursement obligation by agreement.

11. Because of the difficulty in valuing claims that are unliquidated or contingent, persons holding claims of that kind may not bring an action under subsection (1)(b). If the claim remains unliquidated or contingent throughout the limitation period in Section 6-110, then these creditors have no remedy for noncompliance under that subsection. They may, however, be entitled to a remedy under subsection (1)(a) or (11) for failure to distribute the net contract price in accordance with the schedule of distribution.

12. In certain circumstances, subsection (11) imposes liability on a person in direct or indirect control of a seller that is an organization. Excuse under Section 6-106(6) is a “legal justification” that prevents liability from attaching under subsection (11). No special provision applies to the seller who fails to comply with the schedule. The seller already owes the debt to the creditor, and other law governs the consequences of a debtor who fails to pay a debt when promised.

Cross-References: Point 1: Section 6-104.

Point 4: Section 4-103.

Point 5: Sections 6-104 and 6-105.

Point 6: Sections 1-201, 6-102, 6-103, and 6-104.

Point 7: Sections 1-102, 1-201, 6-102, and 6-103.

Point 8: Section 6-102.

Point 9: Section 1-203.

Point 10: Section 1-102.

Point 11: Sections 6-102 and 6-110.

Point 12: Section 6-106.

Definitional Cross-References: “Assets”. Section 6-102.

“Bulk sale”. Section 6-102.

“Burden of establishing”. Section 1-201.

“Buyer”. Section 2-103.

“Claim”. Section 6-102.

“Claimant”. Section 6-102.

“Creditor”. Section 6-102.

“Date of the bulk sale”. Section 6-102.

“Equipment”. Section 6-102.

“Good faith”. Section 6-102.

“Inventory”. Section 9-109.

“Net contract price”. Section 6-102.

“Organization”. Section 1-201.

“Person”. Section 1-201.

“Proceeds”. Section 9-306.

“Security interest”. Section 1-201.

“Seller”. Section 2-103.

“Written”. Section 1-201.


§ 28:6-108. Bulk sales by auction; bulk sales conducted by liquidator. [Repealed]

Repealed.


(Dec. 30, 1963, 77 Stat. 716, Pub. L. 88-243, § 1; Apr. 9, 1997, D.C. Law 11-239, § 2, 44 DCR 936; Oct. 23, 2014, D.C. Law 20-215, § 31, 61 DCR 13083.)

Prior Codifications

1981 Ed., § 28:6-108.

1973 Ed., § 28:6-108.

Editor's Notes

Applicability of D.C. Law 20-215: Section 32 of D.C. Law 20-215 provided that the act shall apply as of January 1, 2016.

Uniform Commercial Code Comment

Prior Uniform Statutory Provision:Section 6-108.

Changes: Revised, expanded to include sales conducted by a liquidator on the seller’s behalf, and form of notice added.

Purposes of Changes and New Matter: 1. This section applies only to bulk sales by auction or conducted by a liquidator on the seller’s behalf, as defined in Section 6-102(1)(c). Bulk sales conducted by an auctioneer or liquidator on its own behalf are treated as ordinary bulk sales and are not subject to this section.

2. Regardless of whether the assets are sold directly from the seller to the buyer, are sold to a variety of buyers at auction, or are sold on the seller’s behalf by a liquidator to one or more buyers, a going-out-of-business sale of inventory presents similar risks to claimants. Auctioneers and liquidators are likely to be in a better position to ascertain whether the sale they are conducting is, or is part of, a bulk sale than are their customers. Accordingly, buyers at auctions and from liquidators selling assets of others need not be concerned with complying with this Article. Instead, this Section imposes upon auctioneers and liquidators duties and liabilities that are similar, but not always identical, to those of a buyer under Sections 6-104(1) and 6-107. Except to the extent that this section treats bulk sales by auctioneers and liquidators differently from those conducted by the seller on its own behalf, the Official Comments to Sections 6-105(1) and 6-107, as well as the Comments to Sections 6-105 and 6-106, which those sections incorporate by reference, are applicable to sales to which this section applies.

3. Subsection (1)(d) sets forth the maximum cumulative liability for auctioneers and liquidators “in any one bulk sale,“ which term includes a series of sales by a liquidator. This liability is to be calculated in a manner similar to that set forth in Sections 6-107(4) and 6-107(5). The term “net proceeds of the auction or sale allocable to inventory and equipment” is analogous to the term “net value of the inventory and equipment”; however, the former takes into account the reasonable expenses of the auction or sale whereas the latter does not. Also, the latter is doubled whereas the former is not. 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 inventory and equipment“ is determined by multiplying the part of the net proceeds paid to or applied for the benefit of a creditor by a fraction whose numerator is the net proceeds of the sale allocable to inventory and equipment and whose denominator is the total net proceeds of the auction or sale. Because the amount of the net proceeds allocable to inventory and equipment is not doubled, the auctioneer or liquidator is not entitled to credit for payments made to the seller.

4. Section 6-107(3) applies to all bulk sales. Accordingly, an auctioneer or liquidator who makes a good faith effort to comply with the requirements of this Article or to exclude the sale from this Article or who acts under a good faith belief that this Article does not apply to the sale faces no liability whatsoever.

Cross-References: Point 1: Section 6-102.

Point 2: Sections 6-102, 6-104, 6-105, 6-106, and 6-107.

Point 3: Sections 6-102 and 6-107.

Point 4: Section 6-107.

Definitional Cross-References: “Assets”. Section 6-102.

“Auctioneer”. Section 6-102.

“Bulk sale”. Section 6-102.

“Claimants”. Section 6-102.

“Creditor”. Section 6-102.

“Debt”. Section 6-102.

“Equipment”. Section 9-109.

“Inventory”. Section 9-109.

“Liquidator”. Section 6-102.

“Net proceeds”. Section 6-102.

“Person”. Section 1-201.

“Seller”. Section 2-103.

“Written”. Section 1-201.


§ 28:6-109. What constitutes filing; duties of filing officer; information from filing officer. [Repealed]

Repealed.


(Dec. 30, 1963, 77 Stat. 716, Pub. L. 88-243, § 1; renumbered and amended, Apr. 9, 1997, D.C. Law 11-239, § 2, 44 DCR 936; Oct. 23, 2014, D.C. Law 20-215, § 31, 61 DCR 13083.)

Prior Codifications

1981 Ed., § 28:6-109.

1973 Ed., § 28:6-109.

Editor's Notes

Applicability of D.C. Law 20-215: Section 32 of D.C. Law 20-215 provided that the act shall apply as of January 1, 2016.

Uniform Commercial Code Comment

Prior Uniform Statutory Provision: None Purposes of New Matter:

This Article contemplates public filing of bulk sale notices and lists of claimants in a single filing office in each state. This section, which derives substantially from Sections 9-403 and 9-407, governs filing. The filing system is designed to enable one seeking information about a sale to discover any filed notices or lists by searching under either the seller’s or the buyer’s (but not the auctioneer’s or liquidator’s) individual, partnership, or corporate name.

Cross-References:Sections 6-103, 6-105, 9-403, and 9-407.

Definitional Cross-References: “Auctioneer”. Section 6-102.

“Buyer”. Section 2-103.

“Liquidator”. Section 6-102.

“Person”. Section 1-201.

“Seller”. Section 2-103.

“Send”. Section 1-201.


§ 28:6-110. Limitation of actions. [Repealed]

Repealed.


(Dec. 30, 1963, 77 Stat. 717, Pub. L. 88-243, § 1; renumbered and amended, Apr. 9, 1997, D.C. Law 11-239, § 2, 44 DCR 936; Oct. 23, 2014, D.C. Law 20-215, § 31, 61 DCR 13083.)

Prior Codifications

1981 Ed., § 28:6-110.

1973 Ed., § 28:6-110.

Editor's Notes

Applicability of D.C. Law 20-215: Section 32 of D.C. Law 20-215 provided that the act shall apply as of January 1, 2016.

Uniform Commercial Code Comment

Prior Uniform Statutory Provision:Section 6-111 (1987 Official Text).

Changes: Statute of limitations extended and clarified.

Purposes of Changes and New Matter: 1. This Article imposes liability upon only those who do not make a good faith and commercially reasonable effort to comply with the requirements of the Article or to exclude the sale from the application of the Article and who do not hold a good faith and commercially reasonable belief that the Article is inapplicable to the sale. Consequently, it extends the six-month limitation period of the 1987 Official Text, which applies to good faith transferees as well as those not in good faith, to one year. The period commences with the date of the bulk sale.

2. Cases decided under the 1987 Official Text of Article 6 disagree over whether the complete failure to comply with the requirements of that Article constitutes a concealment that tolls the limitation. This Article adopts the view that noncompliance does not of itself constitute concealment.

3. This Article does not contemplate tolling the limitation for actions against a person in control of the seller who fails to distribute the net contract price in accordance with the schedule of distribution. Those actions must be commenced within one year after the alleged violation occurs.

Cross-References: Point 1: Sections 1-201, 6-102, 6-107 and 6-108.

Point 3: Section 6-107.

Definitional Cross-References: “Action”. Section 1-201.

“Auctioneer”. Section 6-102.

“Buyer”. Section 2-103.

“Date of the bulk sale”. Section 6-102.

“Liquidator”. Section 6-102.


§ 28:6-111. Limitation of actions and levies. [Repealed]

Repealed.


(Dec. 30, 1963, 77 Stat. 717, Pub. L. 88-243, § 1; Oct. 23, 2014, D.C. Law 20-215, § 31, 61 DCR 13083.)

Prior Codifications

1981 Ed., § 28:6-111.

1973 Ed., § 28:6-111.

Editor's Notes

Applicability of D.C. Law 20-215: Section 32 of D.C. Law 20-215 provided that the act shall apply as of January 1, 2016.


§ 28:6-112. Compliance with section 47-4461. [Repealed]

Repealed.


(June 9, 2001, D.C. Law 13-305, § 407(b), 48 DCR 334; Oct. 23, 2014, D.C. Law 20-215, § 31, 61 DCR 13083.)

Cross References

Notice of bulk sale, § 47-4461.

Editor's Notes

Section 410 (f) of D.C. Law 13-305 provided: “Section 407 shall apply as of January 1, 2001.”

Applicability of D.C. Law 20-215: Section 32 of D.C. Law 20-215 provided that the act shall apply as of January 1, 2016.