23-1104. NOTICE OF TRANSFER BY DISTRIBUTOR — CONSENT BY SUPPLIER. (1) A distributor who proposes to transfer the distributor’s business shall give the supplier written notice of the distributor’s proposed transfer of the distributor’s business not less than thirty (30) days prior to the date specified in the notice for completion of the transfer, except in cases of transfer to a designated member, in which case the transferee shall give the supplier written notice of the transfer within a reasonable time after the transfer is completed.

(2) A supplier’s written consent shall be required for a transfer of the distributor’s business to a person other than a designated member. Provided however, written consent from a supplier shall be required for a transfer of the distributor’s business to a designated member if any of the following conditions apply:

(a) The transferee or any owner of the transferee has been convicted of a felony under the laws of any state or of the federal government which would adversely affect the good will or interests of the supplier.

(b) The transferee or any owner of the transferee has had a license for the sale of beer, wine or any alcoholic beverage suspended or revoked by the regulatory agency of the federal government or of any state and such suspension or revocation interrupted service by the transferee or by the owner of the transferee for a period of more than thirty (30) days.

(c) The transferee or any owner of the transferee is insolvent within the definition of section 101, title 11, United States Code, or there has been a liquidation, dissolution or assignment for the benefit of creditors of substantially all of the transferee’s business or assets, or an order for relief under chapter 7, title 11, United States Code, has been entered with respect to the transferee.

(d) The transferee or any owner of the transferee has had any previous agreement with the supplier involuntarily terminated, canceled, discontinued or not renewed by the supplier for good cause.

(3) If the transferee is a designated member, a supplier shall not interfere with, prevent, or unreasonably delay the transfer of the distributor’s business. An unreasonable delay is one that exceeds thirty (30) days after the service of the notice required by subsection (1) of this section and the receipt of all material information reasonably requested from which the supplier can determine whether the transfer to the designated member may require the supplier’s consent. If consent is required, a supplier may not withhold consent or unreasonably interfere with the transfer of the distributor’s business if the transferee meets reasonable standards and qualifications which are material and nondiscriminatory.

(4) If the transferee is not a designated member, a supplier may not withhold consent or unreasonably interfere with or delay the transfer of the distributor’s business if the transferee meets reasonable standards and qualifications which are material and nondiscriminatory. An unreasonable delay is one that exceeds thirty (30) days after the receipt of all material information reasonably requested to enable the supplier to determine whether the transferee meets reasonable standards and qualifications.

(5) In any legal action, or other dispute resolution proceeding, between a distributor and supplier relating to the supplier’s refusal to consent to the transfer of the distributor’s business to a transferee, the distributor shall have the burden of proving that the supplier withheld consent, interfered with or delayed the proposed transfer of the distributor’s business. Upon the distributor making such prima facie showing, the supplier shall have the burden of proving that the proposed transferee does not meet such reasonable standards and qualifications.

History:

[23-1104, added 1993, ch. 312, sec. 1, p. 1151.]