Legislation that would eliminate the requirement to publish public notices of bulk sales as well as the statutory scheme that protects creditors was passed by the Assembly Judiciary Committee on Tuesday on a 7-0 vote.
Introduced by Senator Ellen Corbett (D-San Leandro), SB 12 was amended late last week to permit the notices to continue when the distributor of alcoholic beverages or tobacco products is involved in a bulk sale. SB 12 would, however, repeal California's bulk sales law that protects all other types of creditors, buyers and sellers many of whom are small businesses.
The bill offers no proposal to replace the safeguards that are currently in place. The only recourse for many of these businesses would be through the judicial process but even with a judgment in hand, it is very likely that all of the assets of the debtor business would already be gone.
The California Commission on Uniform State Laws is the sponsor of the bill and has been working to repeal the law for several years. The Commission argues that emerging technology and existing regulations provide an adequate remedy.
SB 12 is opposed by CNPA, the California Escrow Association and the California Escrow Institute.
SB 12 will have its last policy committee hearing on Monday, July 2 in the Assembly Revenue and Taxation Committee.