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TRANSCRIPT ACT 3952: BULK SALES LAW  Purpose of the Law meant to protect creditors of businessmen against preferential or fraudulent transfers Coverage of the Law The law covers all transactions, whether done in good faith or not, or whether or not the seller is in a state of insolvency, that fall within the description of what is a âbulk sale.â  Types of transactions which are treated as âbulk salesâ: 1. Sale, transfer, mortgage or assignments of a stock of goods, wares, merchandise, provisions, or materials otherwise than in the ordinary course of trade;- ---extra ordinary sales of good 2. Sale transfer, mortgage or assignments of all, or substantially all, of the business or trade of the vendor, mortgagor, transferor, or assignor;- ordinary sale of business 3. Sale, transfer, mortgage, or assignment of all, or substantially all, of the fixtures and equipment used in the business of the vendor, mortgagor, transferor, or assignor.- extra ordinary sales of equipment. Note: Only creditors at the time of the sale in violation of the law are within the protection of the laws and creditors subsequent to the sale are not covered. · Even if the transaction falls within the definition of âbulk saleâ, the following are not deemed covered by the law: 1.  If the vendor, mortgagor, transferor or assignor produces and delivers a written waiver of the provisions of the law from his creditors as shown by verified statements; 2. The law does not apply to executors, administrators, receivers, assignees in insolvency, or public officers, acting under process. Obligations when transaction is a bulk sale: 1. The vendor must deliver to such vendee a written statement of: a. names and addresses of all creditors to whom said vendor or mortgagor may be indebted; b.  amount of indebtedness due or owing to each of said creditors 2. The vendor must apply the purchase money to the prorata payment of bona fide claims of the creditors as shown in the verified statement. 3.    The seller, at least 10 days before the sale, shall: a. make a full detailed inventory of the goods, merchandise, etc., cost price of each article to be included in the sale b. notify every creditor at least 10 days before transferring possession of the goods, of the price, terms and conditions of the sale  Consequences of Violation of Requirements under #6 above stated: 1. When 6(a) above is not complied with, the sale itself is void; the seller will be criminally liable. 2. When 6(b) above is not complied with, the sale itself is also void; seller is also criminally liable. 3. When 6(c) is not complied with, the sale is not void; no criminal liability on the seller.

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