Legal Definitions - bulk sale

A bulk sale refers to the transfer of a significant portion, or even all, of a business's assets in a transaction that falls outside its regular, day-to-day operations. This type of sale is distinct from the routine sales a business makes to its customers as part of its ongoing activities. It typically involves assets such as inventory, equipment, real estate, or even intellectual property, and often occurs when a business is closing, selling off a major division, or undergoing a substantial change in ownership.

Here are some examples to illustrate the concept of a bulk sale:

• Example 1: Restaurant Closure

  The owner of a long-standing local bakery decides to retire and sells all of the bakery's commercial ovens, display cases, mixing equipment, and even the recipes for its signature pastries to another entrepreneur who plans to open a new establishment.

  This is a bulk sale because the bakery's usual business is selling baked goods to individual customers, not divesting its entire operational setup and intellectual property. The sale of all its assets is a one-time event outside its normal revenue-generating activities.

• Example 2: Manufacturing Plant Divestiture

  A large multinational conglomerate decides to streamline its operations and sells one of its chemical manufacturing plants, including the land, the factory building, all the specialized machinery, and the environmental permits associated with that specific facility, to a competitor.

  This qualifies as a bulk sale because the conglomerate's primary business is producing and selling chemical products, not selling off entire factories and their associated assets. This is a significant, non-routine transaction involving substantial business assets.

• Example 3: Retailer Liquidating Inventory

  An independent bookstore, facing declining sales, decides to close its doors. Instead of selling books individually to customers over several months, it sells its entire remaining inventory of tens of thousands of books, along with all its shelving units and point-of-sale systems, to a single liquidation company.

  While selling books is the bookstore's business, selling *all* of its inventory and fixtures in one large lot to a liquidator is not its ordinary course of business, which involves selling individual books to end-user customers. This wholesale disposal of its entire stock constitutes a bulk sale.