UNIFORM COMMERCIAL CODE — BULK TRANSFERS
"Bulk transfers"; transfers of equipment; enterprises subject to this chapter; bulk transfers subject to this chapter.
Transfers excepted from this chapter.
Schedule of property, list of creditors.
Notice to creditors.
Auction sales; "auctioneer".
What creditors protected.
Limitation of actions and levies.
Ch. 406 Cross-reference
See definitions in s. 401.201
This chapter shall be known and may be cited as uniform commercial code—bulk transfers.
"Bulk transfers"; transfers of equipment; enterprises subject to this chapter; bulk transfers subject to this chapter. 406.102(1)
A "bulk transfer" is any transfer in bulk and not in the ordinary course of the transferor's business of a major part in value of the inventory, as defined in s. 409.102 (1) (Ls)
, of an enterprise subject to this chapter.
A transfer of a substantial part of the equipment, as defined in s. 409.102 (1) (i)
, of such an enterprise is a bulk transfer if it is made in connection with a bulk transfer of inventory, but not otherwise.
The enterprises subject to this chapter are all those whose principal business is the sale of merchandise from stock, including those who manufacture what they sell.
The sale, transfer or assignment, in bulk, of any stock of merchandise or of fixtures, pertaining to the merchandise, including any sale, transfer or assignment made in consideration of any existing indebtedness, otherwise than in the ordinary course of trade and in the usual conduct of business by retailers of alcohol beverages, is subject to this chapter.
Except as limited by s. 406.103
all bulk transfers of goods located within this state are subject to this chapter.
History: 1981 c. 79
; 2001 a. 10
Transfers excepted from this chapter. 406.103(1)
The following transfers are not subject to this chapter:
Those made to give security for the performance of an obligation;
General assignments for the benefit of all the creditors of the transferor, and subsequent transfers by the assignee thereunder;
Transfers in settlement or realization of a lien or other security interest;
Sales by receivers, personal representatives, trustees in bankruptcy, or any public officer under judicial process;
Sales made in the course of judicial or administrative proceedings for the dissolution or reorganization of a corporation and of which notice is sent to the creditors of the corporation pursuant to order of the court or administrative agency;
Transfers to a person maintaining a known place of business in this state who becomes bound to pay the debts of the transferor in full and gives public notice of that fact, and who is solvent after becoming so bound;
A transfer to a new business enterprise organized to take over and continue the business, if public notice of the transaction is given and the new enterprise assumes the debts of the transferor and the transferor receives nothing from the transaction except an interest in the new enterprise junior to the claims of creditors;
Transfers of property which is exempt from execution.
Public notice under sub. (1) (f)
may be given by publication of a class 2 notice, under ch. 985
, where the transferor had its principal place of business in this state. The notice shall include the names and addresses of the transferor and transferee and the effective date of the transfer.
History: 1991 a. 316
; 2001 a. 102
Schedule of property, list of creditors. 406.104(1)(1)
Except as provided with respect to auction sales (s. 406.108
), a bulk transfer subject to this chapter is ineffective against any creditor of the transferor unless:
The transferee requires the transferor to furnish a list of the transferor's existing creditors prepared as stated in this section; and
The parties prepare a schedule of the property transferred sufficient to identify it; and
The transferee preserves the list and schedule for 6 months next following the transfer and permits inspection of either or both and copying therefrom at all reasonable hours by any creditor of the transferor, or files the list and schedule with the department of financial institutions.
The list of creditors must be signed and sworn to or affirmed by the transferor or the transferor's agent. It must contain the names and business addresses of all creditors of the transferor, with the amounts when known, and also the names of all persons who are known to the transferor to assert claims against the transferor even though such claims are disputed. If the transferor is the obligor of an outstanding issue of bonds, debentures or the like as to which there is an indenture trustee, the list of creditors need include only the name and address of the indenture trustee and the aggregate outstanding principal amount of the issue. The list of creditors shall include the name and address of the clerk of the municipality in which the property was last assessed.
Responsibility 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.
History: 1991 a. 316
; 1995 a. 27
Notice to creditors.
In addition to the requirements of s. 406.104
, any bulk transfer subject to this chapter except one made by auction sale (s. 406.108
) is ineffective against any creditor of the transferor unless at least 10 days before the transferee takes possession of the goods or pays the major part of the purchase price, whichever happens first, the transferee gives notice of the transfer in the manner and to the persons specified in s. 406.107
History: 1991 a. 316
The names and business addresses of the transferor and transferee, and all other business names and addresses used by the transferor within 3 years last past so far as known to the transferee; and
Whether or not all the debts of the transferor are to be paid in full as they fall due as a result of the transaction, and if so, the address to which creditors should send their bills.
If the debts of the transferor are not to be paid in full as they fall due or if the transferee is in doubt on that point then the notice shall state further:
The location and general description of the property to be transferred and the estimated total of the transferor's debts;
The address where the schedule of property and list of creditors (s. 406.104
) may be inspected;
Whether the transfer is to pay existing debts and if so the amount of such debts and to whom owing;
Whether the transfer is for new consideration and if so the amount of such consideration and the time and place of payment.
The notice in any case shall be delivered personally or sent by registered mail or certified mail to all the persons shown on the list of creditors furnished by the transferor (s. 406.104
) and to all other persons who are known to the transferee to hold or assert claims against the transferor.
Auction sales; "auctioneer". 406.108(1)
A bulk transfer is subject to this chapter even though it is by sale at auction, but only in the manner and with the results stated in this section.
The transferor shall furnish a list of the transferor's creditors and assist in the preparation of a schedule of the property to be sold, both prepared as stated in s. 406.104
The person or persons other than the transferor who direct, control or are responsible for the auction are collectively called the "auctioneer". The auctioneer shall: