§ 18B-1307. Transfer of wholesaler's business. - North Carolina Statutes

§18B‑1307.  Transfer of wholesaler's business.

(a)        Right of Transferto Designated Family Member upon Death. – Upon the death of a wholesaler, thatindividual's interest in the wholesaler business, including the rights underthe franchise agreement with the supplier, may be transferred or assigned to adesignated family member.  The transfer or assignment shall not be effectiveuntil written notice is given to the supplier, but the supplier's consent isnot required for the transfer or assignment.  "Designated familymember" means the deceased wholesaler's spouse, child, grandchild, parent,brother or sister, who is entitled to inherit the deceased wholesaler'sownership interest under the terms of the deceased wholesaler's will or othertestamentary device or under the laws of intestate succession.  With respect toan incapacitated individual having an ownership interest in a wholesaler, theterm "designated family member" also means the person appointed bythe court as the conservator of such individual's property.  The term alsoincludes the appointed and qualified personal representative and thetestamentary trustee of a deceased wholesaler.

(b)        Approval of CertainTransfers. – Upon notice to and approval by the supplier, an individual owningan interest in a wholesaler may sell, assign or transfer that interest,including the wholesaler's rights under its franchise agreement with thesupplier, to any qualified person.  Within 30 days of receipt of notice of theintended sale, assignment or transfer, the supplier shall request anyadditional relevant, material information reasonably necessary for decidingwhether to approve the transaction.  The supplier shall have 30 days fromreceipt of that information to object to the sale, assignment or transfer.  Thesupplier may object only if the proposed transferee fails to meetqualifications and standards that are nondiscriminatory, material, reasonableand consistently applied to North Carolina wholesalers by the supplier.  Theburden shall be upon the supplier to prove that the proposed transferee is notqualified.

(c)        Damages. – Asupplier who disapproves or prevents a proposed assignment or change ofownership in violation of this section shall be liable to the wholesaler whoproposed to make the sale, assignment or transfer for the difference betweenthe disapproved sale price and a subsequent actual price of a sale of the sameassets completed within a reasonable period.  If, however, the proposedtransfer or sale was to a business associate at a bargain price, the amount ofcompensation shall be at least the fair market value of the interest proposedto be sold or transferred, minus the proceeds of an actual sale of the interestcompleted within a reasonable time. (1989, c. 142, s. 1.)