(1) A bulk transfer is subject to this Article even though it is by sale at auction, but only in the manner and with the results stated in this section.
(2) The transferor shall furnish a list of his creditors and assist in the preparation of a schedule of the property to be sold, both prepared as before stated (Section 6-104).
(3) The person or persons other than the transferor who direct, control or are responsible for the auction are collectively called the "auctioneer". The auctioneer shall:
(a) receive and retain the list of creditors and prepare and retain the schedule of property for the period stated in this Article (Section 6-104); and
(b) give notice of the auction personally or by registered or certified mail at least ten days before it occurs to all persons shown on the list of creditors and to all other persons who are known to him to hold or assert claims against the transferor, but, if the transferor is the obligor of an outstanding issue of bonds, debentures or the like as to which there is an indenture trustee, no notice need be delivered or sent to holders of the bonds, debentures or the like.
(4) Failure of the auctioneer to perform any of these duties does not affect the validity of the sale or the title of the purchasers, but if the auctioneer knows that the auction constitutes a bulk transfer such failure renders the auctioneer liable to the creditors of the transferor as a class for the sums owing to them from the transferor up to but not exceeding the net proceeds of the auction. If the auctioneer consists of several persons their liability is joint and several.
UNIFORM LAWS COMMENT: Prior Uniform Statutory Provision: None.
Purposes:
1. The section is intended to make appropriate application of the requirements of this Article to auction sales. It is clear that the provisions of the four previous sections in their literal form cannot be applied directly to an auction, since neither the price nor the identity of the purchaser or purchasers can be known until the sale occurs. But it is equally clear that if auctions were excluded entirely from the transfers covered by this Article the way would be open to a debtor to carry out a bulk transfer of his property without notice to his creditors and without any duty upon anyone to see to the application of the proceeds. The section attempts to meet this situation by imposing the obligations stated in the section upon the persons there described.
2. Since the obligation to give advance notice, etc., cannot rest upon bidders at an auction it is clear that the sale must be effective so far as they are concerned whether or not the section is complied with. Subsection (4) therefore states a sanction which does not affect the purchasers. Notice that the sanction applies only "if the auctioneer knows that the auction constitutes a bulk transfer." No doubt in some cases, as for instance when goods are simply received on consignment for sale, he may not know.
3. Subsection (3)(c) is a corollary of Section 6-106 and should be omitted if that section is. See note to that section.
Cross References:
Point 1: Sections 6-104 through 6-107.
Point 2: Sections 6-104 through 6-107.
Point 3: Section 6-106 and Note thereto.
Definitional Cross References:
"Bulk transfer". Section 6-102.
"Creditor". Sections 1-201 and 6-109.
"Person". Section 1-201.
"Purchaser". Section 1-201.
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