Be aware of bulk sales laws

Buyers of businesses and real estate need to be aware that some states have bulk sales laws that impose obligations on buyers for certain debts owed by the seller like unpaid taxes. The purpose of these laws is to protect creditors in the event a business sells a substantial portion of its assets outside the ordinary course of business. In order to avoid the potentially harsh consequences created by bulk sales laws, one should consult with an attorney to ensure that the transaction documents include language protecting buyers against such an outcome and requiring bulk sales compliance.

Client alert authored by Ryan A. Biller (312-855-4607), associate.

This Chuhak & Tecson, P.C., communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.