Bulk sales legislation arose out of an attempt to protect the creditors of merchants who would sell their stock in trade and either squander or secrete the proceeds. Under the normal rules relating to fraudulent conveyances, the creditor could pursue the property transfixed if he could show that the transfer was made with the intent to hinder, delay, or defraud creditors, and that the transferee had knowledge of the transferor's design. However, since a creditor would not be entitled to relief if the transferee was an innocent purchaser for an adequate consideration, and it generally would be difficult to prove that the transferee was aware of any fraudulent intent which the transferor might have had, the protection afforded by the ordinary doctrines concerning fraudulent conveyances or transfers was inadequate. Under bulk sales legislation, the creditor is normally allowed to treat certain transfers in bulk as void if the parties do not comply with the statutory requirements regardless of their intent or the fairness of the transaction. The statutory requirements, though varying from jurisdiction to jurisdiction, ordinarily include the preparation of an inventory of the assets to be transferred, the preparation of a list of creditors, and a requirement that notice of the intended transfer be sent to the creditors of the transferor prior to the completion of the transaction. Article 6 of the Nebraska version of the Uniform Commercial Code, which will become operative at midnight on September 1, 1965, replaces the present Nebraska bulk sales law, and will govern the area of bulk transfers.
The Nebraska Uniform Commercial Code: Article 6—Bulk Transfers,
43 Neb. L. Rev. 760
Available at: http://digitalcommons.unl.edu/nlr/vol43/iss4/5