Kentucky Administrative Regulations › Title 40 - DEPARTMENT OF LAW › Chapter 2 - Office of Consumer Protection › Section 40 KAR 2:220 - Application procedure for obtaining going-out-of-business sale permits in excess of two (2) sales in a four (4) year period

Current through Register Vol. 51, No. 1, July 1, 2024
RELATES TO:
				KRS
				365.447
NECESSITY, FUNCTION, AND CONFORMITY:
				KRS
				365.447 requires in pertinent part the Office
				of the Attorney General to promulgate administrative regulations pertaining to
				applications by any party for more than two (2) going-out-of-business sale
				permits during a four (4) year period. This administrative regulation sets
				forth the procedures for applying for a subsequent permit, the investigation to
				be initiated and conducted by the Attorney General, and charges to the
				applicant, pursuant to
				KRS
				365.447.
Section
			 1. Application Procedure for Excess Permits. When any individual,
			 partnership, corporation or other firm seeks a permit to conduct more than two
			 (2) going-out-of-business sales within a four (4) year period, such party shall
			 obtain, complete, and submit to the Office of the Attorney General, Division of
			 Consumer Protection, an application form to obtain such permit.
Section 2. Investigation to Determine
			 Legitimate Business Purpose.
(1) Upon receipt
			 of such application, the Office of the Attorney General, Division of Consumer
			 Protection, shall initiate and conduct an investigation to determine if there
			 is a legitimate business reason to conduct more than two (2)
			 going-out-of-business sales within a four (4) year period. The Division of
			 Consumer Protection shall investigate the circumstances of all previous
			 going-out-of-business sales conducted by the applicant within the previous four
			 (4) years and consider all relevant information in reaching its decision.
			 Relevant business records and information shall include information relating to
			 activities and going-out-of-business sales conducted in other jurisdictions.
			 The Attorney General may request additional information and relevant business
			 records from the applicant in determining the legitimacy of the business reason
			 for the application.
(2) The
			 Attorney General shall determine if there is a legitimate business reason for
			 the applicant's request for any excess permits and deny or grant the permit
			 within thirty (30) days of receiving the application.
(3) Valid business reasons for conducting
			 more than two (2) going-out-of-business sales within a four (4) year period
			 shall include:
(a) Insolvency of the business
			 or owner(s);
(b) Unprofitability or
			 inadequate profitability of the business;
(c) Retirement of the owner(s);
(d) Intent of the owner(s) to engage in other
			 enterprises or endeavors;
(e)
			 Termination of the business to free assets to pay any judgment of any
			 court;
(f) Death of the owner(s),
			 and the representatives of the estate(s), or their heirs, distributees,
			 devisees, legatees, or their successors and assigns seek to terminate the
			 business;
(g) Where the business is
			 required or compelled to be discontinued because:
1. The premises upon which it is being
			 conducted have been taken by eminent domain; or
2. The premises upon which it is being
			 conducted must be vacated pursuant to court order pursuant to a legal or
			 judicial proceeding; or
3. The
			 business's lease on the premises upon which it is operating has been terminated
			 by the landlord, or the landlord will not renew the lease.
(4) Business reasons which are not
			 legitimate for the purposes of
			 KRS
			 365.447 shall include, but not be limited to:
(a) Opening the business with intent to
			 conduct a going-out-of-business sale with inventory brought in for that
			 purpose, whether such inventory is owned by the business owner(s) or not, more
			 than ninety (90) days prior to the application for the permit;
(b) Buying into an existing business with the
			 intent to conduct a going-out-of-business sale, and bringing in large
			 quantities of goods for that purpose, whether such inventory is owned by the
			 business owner(s) or not, more than ninety (90) days prior to the application
			 for the permit.