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Bulk Sales
The Bulk Sale provision the Uniform Commercial Code protects creditors by voiding an out-of-the-ordinary bulk transfer of debtor's assets unless the recipient of the transfer (transferee) gives notice to creditors at least ten days before the sale is made. Bulk Sales Laws cover the sale of business equipment if it is made in connection with a bulk transfer of inventory.
In the case of a bulk sale at an auction, the auctioneer has the same responsibility as the transferee. In other words, if the auctioneer knows the auction constitutes a bulk transfer, the auctioneer is - or may well become - personally liable to the creditors of the party selling the assets.
Special Note: Many states have repealed their Bulk Sales Laws.
Source: "Manual of Credit and Commercial Laws," edited by Charles M. Tatelbaum and John K. Pearson, available at the NACM Bookstore.
Edited by Michael C. Dennis