§ 32B-14-305 — Sale or transfer of supplier's business.

(1) (1)(a) For purposes of this section, "successor" means a supplier who obtains a distribution right of a brand that a wholesaler distributes in this state pursuant to a distributorship agreement with another supplier who previously had the distribution rights of the brand.
(1)(b) For purposes of Subsection (1)(a), the successor may obtain a distribution right:
(1)(b)(i) by any means, including:

(1)(b)(i)(A) merger;
(1)(b)(i)(B) purchase of corporate shares; or
(1)(b)(i)(C) purchase of assets; and
(1)(b)(ii) from:

(1)(b)(ii)(A) a supplier; or
(1)(b)(ii)(B) a person acting in an official capacity who is not a supplier including a nominee, representative, or fiduciary.
(2) (2)(a) A successor to a supplier that acquires a supplier's product or brand in this state is bound by the terms and conditions of each distributorship agreement with a wholesaler in this state that was in effect on the date on which the successor receives the assets or rights of the previous supplier.
(2)(b) Notwithstanding Subsection (2)(a), if the requirements of Subsection (2)(c) are met, a successor may contractually require the wholesaler to:
(2)(b)(i) execute a new distributorship agreement; and
(2)(b)(ii) comply with the successor's operational standards of performance.
(2)(c) A successor may impose a requirement under Subsection (2)(b) if:
(2)(c)(i) the operational standards of performance being required are consistent with this chapter;
(2)(c)(ii) the operational standards of performance being required are uniformly imposed by the successor on similarly situated wholesalers; and
(2)(c)(iii) the successor provides the wholesaler at least one year to:

(2)(c)(iii)(A) execute a new distributorship agreement; and
(2)(c)(iii)(B) comply with the operational standards of performance.

Legislative History

Enacted by Chapter 276, 2010 General Session