A bulk sale is a sale of goods by a business which engages in selling items out of inventory, often in liquidating or selling a business, and is governed by Article 6 of the Uniform Commercial Code (UCC) which deals with bulk sales. Article 6 has been adopted at least in part in all states. If the parties do not comply with the notification process for a bulk sale, creditors of the seller may obtain a declaration that the sale was invalid against the creditors and the creditors may take possession of the goods or obtain judgment for any proceeds the buyer received from a subsequent sale.
UCC Section 6-104 specifies the duties of the bulk sales buyer, including determining the identity of the seller, and preparation of a list of claimants and a schedule of distribution. These duties are imposed on the buyer in order to give claimants the opportunity to learn of the bulk sale before the seller has been paid and disappeared with the money.
The Wyoming Provision in a Bulk Sales Agreement Regarding Information to be Supplied by Seller is a clause designed to protect both buyers and sellers in a transaction involving the sale of a business or its assets. This provision specifically pertains to deals that take place in the state of Wyoming. The purpose of the Wyoming Provision is to ensure that the buyer has access to accurate and complete information about the business they are purchasing, as well as to protect the seller from any undisclosed liabilities. It requires the seller to disclose certain crucial information, which may vary depending on the type of transaction, such as an asset sale or a stock sale. There are different types of Wyoming Provision that can be included in a Bulk Sales Agreement. These include: 1. Financial Information: The seller is required to provide the buyer with detailed financial statements, including balance sheets, income statements, and cash flow statements. This information helps the buyer assess the financial health and performance of the business. 2. Inventory Details: In a bulk sale involving inventory, the seller must provide a detailed list of all inventory items, including their current value, quantity, and description. This allows the buyer to determine the value of the inventory they are purchasing. 3. Liabilities and Debts: The seller must disclose any existing or potential liabilities or debts associated with the business, including outstanding loans, pending lawsuits, tax obligations, and other financial obligations. This information helps the buyer assess the risks involved in the transaction. 4. Contracts and Agreements: The seller needs to disclose all contracts and agreements relating to the business, such as leases, supplier agreements, customer contracts, or licensing agreements. This helps the buyer understand the ongoing commitments and obligations of the business. 5. Intellectual Property: If the business owns any intellectual property, such as patents, trademarks, or copyrights, the seller must provide complete details about these assets, including any limitations or encumbrances. This allows the buyer to assess the value and legal protection of the intellectual property. 6. Employee Information: In case of a stock sale or an asset sale that involves employees, the seller must provide details about the employees, such as their names, positions, compensation, benefits, and legal status. This helps the buyer understand the human resources aspect of the business. It is essential for both parties involved in a Bulk Sales Agreement to carefully review and negotiate the specific Wyoming Provision to ensure that all required information is disclosed accurately, reducing the risk of any future disputes or liabilities.
