2022 Kentucky Revised Statutes Chapter 243 - Alcoholic beverages -- licenses and taxes 243.540 Scope of section -- Disposition of stock upon revocation, surrender, court disposition, or nonrenewal of license -- Disposition upon bankruptcy -- Disposal of alcoholic beverages by secured creditor or landlord -- Administrative regulations.
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243.540 Scope of section -- Disposition of stock upon revocation, surrender,
court disposition, or nonrenewal of license -- Disposition upon
bankruptcy -- Disposal of alcoholic beverages by secured creditor or
landlord -- Administrative regulations.
(1)
(2)
(3)
(4)
The provisions of this section shall apply to any licensee who is unable to
continue in business at the licensed premises because of:
(a) An act of God;
(b) A casualty;
(c) An acquisition by a federal, state, city, or other governmental agency
under the power of eminent domain granted to the government or agency;
(d) A voluntary or involuntary acquisition by any corporation or other
business entity recognized by law through the power of eminent domain;
(e) A loss of lease because the landlord fails to renew an existing lease;
(f) Court action;
(g) Default under a security agreement;
(h) Default under a lease; or
(i) Other verifiable business reason.
If a license issued by the department has been revoked, the former licensee
may, under the supervision of the state administrator, dispose of and transfer
the former licensee's stock to another licensee if the disposition is completed
within ninety (90) days and the licensee is a distiller, rectifier, winery, or brewer.
The disposition shall be completed within thirty (30) days if the licensee is a
wholesaler or distributor or within twenty (20) days if the licensee is a retailer.
A retail licensee in good standing with the department who voluntarily ceases
to operate the licensed business for any reason other than revocation by the
board or a court order shall dispose of all alcoholic beverage inventory within
thirty (30) days of the event. The following requirements shall apply to the
disposition of the licensee's inventory:
(a) If the premises is still open to the public and the licensee has not yet
surrendered the license, the licensee shall sell alcoholic beverages only
to the public and shall not sell below costs;
(b) If a licensee has terminated the licensed business, the licensee shall
submit a written request for approval from the state administrator within
ten (10) days in advance of the sale to dispose of the licensee's
remaining inventory. The request shall identify the retailer who is
purchasing the inventory, the proposed date of the sale, and the quantity,
types, and brands of alcohol to be sold; and
(c) If a licensee has more than one (1) licensed retail premises and closes
one (1) or more retail premises and seeks to transfer the inventory to
another licensed retail premises the licensee owns, the licensee shall
submit a request in writing to the state administrator at least ten (10) days
before the inventory is transferred. The request shall identify the premises
to which the alcohol is being transferred, the proposed date of the
transfer, and the quantity, types, and brands of alcohol to be sold.
If a licensee files for bankruptcy or is directed by a court to dispose of inventory
(5)
(6)
to satisfy a lien or judgment, the inventory may be sold only to a licensee
holding any license that authorizes the possession and sale of those alcoholic
beverages. The bankrupt licensee or the licensee subject to the court order
shall notify the department of the sale and shall attach a copy of the court order
or the judgment directing the sale and a list of the quantity, types, and brands
of alcohol to be sold, but if the licensee fails to do so, the notification may be
made by the bankruptcy trustee, the lienholder, or the judgment creditor. Any
licensee who purchases the inventory shall notify the department within five (5)
days after the transfer of the specific inventory sold.
A secured creditor or landlord that is in possession, custody, or control of any
alcoholic beverages owned by a licensee may dispose of those alcoholic
beverages in the following manner:
(a) The secured creditor or landlord shall submit a written request for
approval from the state administrator, within twenty (20) days in advance
of the sale or destruction of the licensee's remaining inventory. The
request shall identify the:
1.
Licensee who is purchasing the inventory or the business to destroy
the inventory;
2.
Proposed date of the sale or destruction; and
3.
Quantity, types, and brands of alcohol to be sold or destroyed;
(b) The proposed transferee or transferees may be any person or persons
holding any license that authorizes the possession and sale of those
alcoholic beverages, or a business authorized to dispose of alcoholic
beverages;
(c) A copy of the written request shall be mailed by the department to the
licensee's registered agent or last known address on file with the
department by certified mail. Within ten (10) days after the department's
mailing of this request, the licensee shall file with the department and
applicant any objection the licensee has to the request, or be permanently
barred from objecting; and
(d) If a sale is approved, the licensee who purchases the inventory shall
notify the department within five (5) days after the transfer of that specific
inventory.
The board may promulgate administrative regulations for additional means for
the transfer or disposal of alcoholic beverage inventory.
Effective:June 29, 2017
History: Amended 2017 Ky. Acts ch. 62, sec. 78, effective June 29, 2017. -Amended 2013 Ky. Acts ch. 121, sec. 77, effective June 25, 2013. -- Amended
2010 Ky. Acts ch. 24, sec. 581, effective July 15, 2010. -- Amended 2000 Ky.
Acts ch. 435, sec. 14, effective July 14, 2000. -- Amended 1998 Ky. Acts ch.
522, sec. 14, effective July 15, 1998. -- Recodified 1942 Ky. Acts ch. 208, sec.
1, effective October 1, 1942, from Ky. Stat. sec. 2554b-144.
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