California Commercial Code 6102 – (a) In this division, unless the context otherwise …
(a) In this division, unless the context otherwise requires:
(1) “Assets” means the inventory and equipment that is the subject of a bulk sale and any tangible and intangible personal property used or held for use primarily in, or arising from, the seller’s business and sold in connection with that inventory and equipment, but the term does not include any of the following:
Terms Used In California Commercial Code 6102
- Affirmed: In the practice of the appellate courts, the decree or order is declared valid and will stand as rendered in the lower court.
- agreement: means the total legal obligation that results from the parties' agreement as determined by this code and as supplemented by any other applicable laws. See California Commercial Code 1201
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Assets: means the inventory and equipment that is the subject of a bulk sale and any tangible and intangible personal property used or held for use primarily in, or arising from, the seller's business and sold in connection with that inventory and equipment, but the term does not include any of the following:
California Commercial Code 6102
- Auctioneer: means a person whom the seller engages to direct, conduct, control, or be responsible for a sale by auction. See California Commercial Code 6102
- Bulk sale: means either of the following:
California Commercial Code 6102
- Claim: means a right to payment from the seller, whether or not the right is reduced to judgment, liquidated, fixed, matured, disputed, secured, legal, or equitable. See California Commercial Code 6102
- Claimant: means a person holding a claim incurred in the seller's business other than any of the following:
California Commercial Code 6102
- Contract: A legal written agreement that becomes binding when signed.
- contract: means the bargain of the parties in fact, as found in their language or inferred from other circumstances, including course of performance, course of dealing, or usage of trade as provided in Section 1303. See California Commercial Code 1201
- Creditor: means a claimant or other person holding a claim. See California Commercial Code 6102
- Date of the bulk sale: means either of the following:
California Commercial Code 6102
- Date of the bulk-sale agreement: means either of the following:
California Commercial Code 6102
- Debt: means liability on a claim. See California Commercial Code 6102
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Holder: means :
California Commercial Code 1201
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Liquidator: means a person who is regularly engaged in the business of disposing of assets for businesses contemplating liquidation or dissolution. See California Commercial Code 6102
- Net proceeds: means the new consideration received for assets sold at a sale by auction or a sale conducted by a liquidator on the seller's behalf less each of the following:
California Commercial Code 6102
- Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See California Commercial Code 1201
- Personal property: All property that is not real property.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Right: includes remedy. See California Commercial Code 1201
- Security interest: includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory note in a transaction that is subject to Division 9 (commencing with Section 9101). See California Commercial Code 1201
- State: means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. See California Commercial Code 1201
- Statute: A law passed by a legislature.
- Term: means a portion of an agreement that relates to a particular matter. See California Commercial Code 1201
- Value: means fair market value. See California Commercial Code 6102
(i) Fixtures (paragraph (41) of subdivision (a) of Section 9102) other than readily removable factory and office machines.
(ii) The lessee’s interest in a lease of real property.
(iii) Property to the extent it is generally exempt from creditor process under nonbankruptcy law.
(2) “Auctioneer” means a person whom the seller engages to direct, conduct, control, or be responsible for a sale by auction.
(3) “Bulk sale” means either of the following:
(i) In the case of a sale by auction or a sale or series of sales conducted by a liquidator on the seller’s behalf, a sale or series of sales not in the ordinary course of the seller’s business of more than half of the seller’s inventory and equipment, as measured by a value on the date of the bulk-sale agreement.
(ii) In all other cases, a sale not in the ordinary course of the seller’s business of more than half the seller’s inventory and equipment, as measured by value on the date of the bulk-sale agreement.
(4) “Claim” means a right to payment from the seller, whether or not the right is reduced to judgment, liquidated, fixed, matured, disputed, secured, legal, or equitable. The term includes costs of collection and attorney’s fees only to the extent that the laws of this state permit the holder of the claim to recover them in an action against the obligor.
(5) “Claimant” means a person holding a claim incurred in the seller’s business other than any of the following:
(i) An unsecured and unmatured claim for employment compensation and benefits, including commissions and vacation, severance, and sick-leave pay.
(ii) A claim for injury to an individual or to property, or for breach of warranty, unless all of the following are satisfied:
(A) A right of action for the claim has accrued.
(B) The claim has been asserted against the seller.
(C) The seller knows the identity of the person asserting the claim and the basis upon which the person has asserted it.
(iii) A claim for taxes owing to a governmental unit, if both of the following are satisfied:
(A) A statute governing the enforcement of the claim permits or requires notice of the bulk sale to be given to the governmental unit in a manner other than by compliance with the requirements of this division.
(B) Notice is given in accordance with the statute.
(6) “Creditor” means a claimant or other person holding a claim.
(7) (i) “Date of the bulk sale” means either of the following:
(A) If the sale is by auction or is conducted by a liquidator on the seller’s behalf, the date on which more than 10 percent of the net proceeds is paid to or for the benefit of the seller.
(B) In all other cases, the later of the date on which either of the following occurs:
(I) More than 10 percent of the net contract price is paid to or for the benefit of the seller.
(II) More than 10 percent of the assets, as measured by value, are transferred to the buyer.
(ii) For purposes of this subdivision the following shall apply:
(A) Delivery of a negotiable instrument (subdivision (1) of Section 3104) to or for the benefit of the seller in exchange for assets constitutes payment of the contract price pro tanto.
(B) To the extent that the contract price is deposited in an escrow, the contract price is paid to or for the benefit of the seller when the seller acquires the unconditional right to receive the deposit or when the deposit is delivered to the seller or for the benefit of the seller, whichever is earlier.
(C) An asset is transferred when a person holding an unsecured claim can no longer obtain through judicial proceedings rights to the asset that are superior to those of the buyer arising as a result of the bulk sale. A person holding an unsecured claim can obtain those superior rights to a tangible asset at least until the buyer has an unconditional right, under the bulk-sale agreement, to possess the asset, and a person holding an unsecured claim can obtain those superior rights to an intangible asset at least until the buyer has an unconditional right, under the bulk-sale agreement, to use the asset.
(8) “Date of the bulk-sale agreement” means either of the following:
(i) In the case of a sale by auction or conducted by a liquidator (subparagraph (i) of paragraph (3)), the date on which the seller engages the auctioneer or liquidator.
(ii) In all other cases, the date on which a bulk-sale agreement becomes enforceable between the buyer and the seller.
(9) “Debt” means liability on a claim.
(10) “Liquidator” means a person who is regularly engaged in the business of disposing of assets for businesses contemplating liquidation or dissolution.
(11) “Net contract price” means the new consideration the buyer is obligated to pay for the assets less each of the following:
(i) The amount of any proceeds of the sale of an asset, to the extent the proceeds are applied in partial or total satisfaction of a debt secured by the asset.
(ii) The amount of any debt to the extent it is secured by a security interest or lien that is enforceable against the asset before and after it has been sold to a buyer. If a debt is secured by an asset and other property of the seller, the amount of the debt secured by a security interest or lien that is enforceable against the asset is determined by multiplying the debt by a fraction, the numerator of which is the value of the new consideration for the asset on the date of the bulk sale and the denominator of which is the value of all property securing the debt on the date of the bulk sale.
(12) “Net proceeds” means the new consideration received for assets sold at a sale by auction or a sale conducted by a liquidator on the seller’s behalf less each of the following:
(i) Commissions and reasonable expenses of the sale.
(ii) The amount of any proceeds of the sale of an asset, to the extent the proceeds are applied in partial or total satisfaction of a debt secured by the asset.
(iii) The amount of any debt to the extent it is secured by a security interest or lien that is enforceable against the asset before and after it has been sold to a buyer. If a debt is secured by an asset and other property of the seller, the amount of the debt secured by a security interest or lien that is enforceable against the asset is determined by multiplying the debt by a fraction, the numerator of which is the value of the new consideration for the asset on the date of the bulk sale and the denominator of which is the value of all property securing the debt on the date of the bulk sale.
(13) A sale is “in the ordinary course of the seller’s business” if the sale comports with usual or customary practices in the kind of business in which the seller is engaged or with the seller’s own usual or customary practices.
(14) “United States” includes its territories and possessions and the Commonwealth of Puerto Rico.
(15) “Value” means fair market value.
(16) “Verified” means signed and sworn to or affirmed.
(b) The following definitions in other divisions apply to this division:
(1) “Buyer.” Paragraph (a) of subdivision (1) of Section 2103.
(2) “Equipment.” Paragraph (33) of subdivision (a) of Section 9102.
(3) “Inventory.” Paragraph (48) of subdivision (a) of Section 9102.
(4) “Sale.” Subdivision (1) of Section 2106.
(5) “Seller.” Paragraph (d) of subdivision (1) of Section 2103.
(c) In addition, Division 1 (commencing with Section 1101) contains general definitions and principles of construction and interpretation applicable throughout this division.
(Amended by Stats. 1999, Ch. 991, Sec. 30. Effective January 1, 2000. Operative July 1, 2001, by Sec. 75 of Ch. 991.)