CHAPTER 117
Distress Sales
Section
117.04 License required; application
117.05 Investigation and issuance
117.01 TITLE.
This chapter may be cited and referred to as the “Distress Sales Chapter.”
(‘87 Code, § 14-8-1) (Ord. 88-027; Am. Ord. 92-002)
117.02 DEFINITIONS.
For the purpose of this chapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
DISTRESS MERCHANDISE SALE. Any offer to sell to the public, or sale to the public, of goods, wares or merchandise on the implied or direct representation that the sale is in anticipation of the termination of a business at its present location or that the sale is being held other than in the ordinary course of business. DISTRESS MERCHANDISE SALES shall include but are not limited to any sale advertised either specifically or in substance as a “fire sale,” “smoke and water damage sale,” “adjustment sale,” “liquidation sale,” “creditor’s sale,” “insolvent sale,” “trustee’s sale,” “bankrupt sale,” “save us from bankruptcy sale,” “insurance salvage sale,” “mortgage sale,” “assignee’s sale,” “adjuster’s sale,” “must vacate sale,” “quitting business sale,” “receiver’s sale,” “loss of lease sale,” “forced out of business sale,” “removal sale,” “change of ownership sale” or “new location sale.”
PERSON. Any individual, estate, trust, receiver, cooperative association, association, club, corporation, company, firm, partnership, joint venture, syndicate or other entity.
(‘87 Code, § 14-8-2) (Ord. 88-027; Am. Ord. 92-002)
117.03 APPLICABILITY.
(A) This chapter shall not apply to any sale conducted by a public officer as part of his official duties, to any sale for which an accounting must be made to a court of law or to any sale conducted pursuant to an order of a court of law.
(B) This chapter does not apply to seasonal sales, clearance sales or similar special sales of non-distress merchandise.
(‘87 Code, § 14-8-8) (Ord. 88-027; Am. Ord. 92-002)
117.04 LICENSE REQUIRED; APPLICATION.
(A) It shall be unlawful for any person to advertise or conduct a distress merchandise sale within the city without having first obtained a license to do so in accordance with the provisions of this chapter. (‘87 Code, § 14-8-4)
(B) (1) Any person desiring to conduct a distress merchandise sale shall make a written application verified under oath to the City Clerk at least 15 days prior to the date on which the sale is to commence. If the merchandise to be sold consists of perishable goods, or goods damaged by smoke, fire or water, the 15-day time period will not be applicable and the City Clerk shall have the discretion to waive the time period or any portion thereof.
(2) Each application shall contain the following information and other reasonably related information as the city shall require:
(a) The name and address of the owner of the goods, wares or merchandise to be sold;
(b) A description of the place where the sale is to be held;
(c) The nature of the occupancy of the place where the sale is to be held, whether by lease or otherwise, and the effective date of the termination of the occupancy of the premises;
(d) The commencement and termination dates of the distress sale;
(e) A full and complete statement of the facts regarding the reasons why the distress merchandise sale is being conducted, the manner in which the sale is to be conducted, the means to be employed in advertising the sale, together with the content of any proposed advertisement or advertising themes, or copies thereof;
(f) If a defunct business is involved, the name and address of the defunct business, and the owner or former owner thereof;
(g) A complete and detailed inventory of the goods, wares and merchandise including goods received on consignment to be offered at the distress merchandise sale, the terms and conditions of the acquisition of the property, the amount and description of the goods, wares or merchandise to be sold, the location of the goods, wares and merchandise at the time of the filing of the application, and the total inventory cost value of the goods;
(h) A statement that the applicant has not in contemplation of the distress merchandise sale ordered, purchased or received on consignment any goods, wares or merchandise for the purpose of selling them at the sale within 90 days prior to the filing of the application;
(i) A statement that no goods will be added to the inventory after the application is made or during the sale;
(j) A statement that the applicant or its principal officers or agents have not been convicted of a violation of the Distress Sales Act, or of this chapter, or had a license issued under the Distress Sales Act or this chapter revoked within five years of the filing of this application.
(3) Along with the application, the person desiring to conduct a distress sale shall submit a license fee of $50 or one-fourth of 1% of the inventory cost value of the goods, wares or merchandise to be sold at the sale, whichever is more. In no case, however, shall the license fee exceed $200. License fees collected under this chapter shall be deposited in the general fund of the city.
(4) If during the period that the license is in effect it appears to the city that all of the goods in the original inventory have not been sold, the city may upon a new application and for good cause shown, extend the license for a period not to exceed 30 days.
(5) Upon the filing of an application for a license, the contents of the application and the issuance of the license shall be confidential information and no disclosure thereof shall be made except that which is necessary in the administration of this chapter. Disclosure of the above-mentioned information may be made with the consent of the applicant. The application and the issuance of the license shall not be confidential after public notice of the proposed sale has been given by the applicant.
(‘87 Code, § 14-8-5)
(Ord. 88-027; Am. Ord. 92-002) Penalty, see § 117.99
117.05 INVESTIGATION AND ISSUANCE.
(A) The City Clerk may, upon the filing of any application, investigate the applicant and examine his affairs in relation to the proposed sale and may examine the inventory and records of the applicant. No license shall be issued if it is found that:
(1) The applicant has held a sale subject to regulation under the Distress Sales Act or this chapter, at the location described in the application, within three years from the date of the application;
(2) The application states that the applicant or any of its principal officers or agents have been convicted of a violation of the Distress Sales Act or this chapter or has had a license issued under the Act or this chapter revoked within five years of the filing of this application; or
(3) The inventory submitted with the application includes goods, wares or merchandise purchased or held on consignment by the applicant or added to his stock in contemplation of the sale and for the purpose of selling the stock at the distress sale; (Any unusual addition to the stock of goods, wares or merchandise which is made within 90 days prior to the filing of the application shall be prima facie evidence that the addition was made in contemplation of the sale for the purpose of selling the goods at the sale.)
(4) The applicant, in ticketing the goods, wares or merchandise for sale has misrepresented the original retail price or value thereof;
(5) The advertisement or advertising themes are false, fraudulent, deceptive or misleading in any respect;
(6) The sales methods to be used by the applicant in conducting the sale will work a fraud upon the purchasers;
(7) The information set forth in the application is insufficient;
(8) Representations made in the application are false; or
(9) The applicant has acquired bankrupt stock or other distress sale merchandise from another area within six months of the application.
(B) If the application which has been submitted complies with the provisions of this chapter and if the required license fee has been paid, the City Clerk shall issue the applicant a license to advertise and conduct the sale described in the application subject to the following conditions:
(1) The sale shall be held at the place named in the application.
(2) The sale shall be held by the licensee for a period of not more than 90 days following the date set forth in the license.
(3) Only goods, wares and merchandise included in the inventory attached to the application shall be displayed on the premises and sold at the sale.
(4) The license shall be prominently displayed at the location of the sale at all times.
(5) The licensee shall keep suitable books at the sale location which shall be open for inspection by the city during normal business hours.
(‘87 Code, § 14-8-6) (Ord. 88-027; Am. Ord. 92-002)
117.06 REVOCATION.
The City Clerk shall revoke any license issued and shall cause a citation to be served upon the person holding the license, pursuant to this chapter, if it finds that the licensee has:
(A) Violated any provision of this chapter;
(B) Violated any condition of the license;
(C) Made any material misstatement in the application for the license;
(D) Failed to include in the inventory required by this chapter all the goods, wares or merchandise being offered for sale;
(E) Offered or permitted to be offered at the sale any goods, wares or merchandise not included in the inventory attached to the application;
(F) Failed to keep suitable records of the sale;
(G) Made or permitted to be made any false or misleading statements or representation in advertising the sale or in displaying, ticketing or pricing goods, wares or merchandise offered for sale; or
(H) Been guilty of any fraudulent practice in the conduct of the sale authorized by the license.
(‘87 Code, § 14-8-7) (Ord. 88-027; Am. Ord. 92-002)
117.07 ADMINISTRATION.
The City Clerk is responsible for the administration of the provisions of this chapter.
(‘87 Code, § 14-8-3) (Ord. 88-027; Am. Ord. 92-002)
117.99 PENALTY.
Any person violating any provision of this chapter shall upon conviction be punished by a fine not to exceed $500 or by imprisonment not to exceed 90 days or both.
(‘87 Code, § 14-8-9) (Ord. 88-027; Am. Ord. 92-002)