www.KreamerLaw.com (515)727-0900


Samuel I. Kreamer, J.D., C.P.A. sikjdcpa@kreamerlaw.com


Mergers & Acquisitions Business Law Succession Planning Wills, Trusts, & Probate


Licensed in both Iowa and Nebraska I-NEDA Associate Member


7155 Lake Drive, Suite 200 West Des Moines, IA 50266


Neither the Nebraska nor Iowa statutes specify how much time must pass between the date of issuance of the notice of sale and the sale date. However, in view of the requirement that notice be issued before any sale, and because the lien can be discharged by payment of the amount due to the dealer by the customer and/or any prior lienholder prior to the sale, a “reasonable” time should be allowed to pass before the sale of the equipment7


7155 Lake Drive, Suite 200 West Des Moines, IA 50266


. Determining a “reasonable” amount of time between the issuance of the notice and the sale of the equipment is generally decided on a case-by-case basis, but it is our recommendation that the sale not be conducted earlier than thirty (30) days after the issuance of the notice of sale.


Both Iowa and Nebraska require the sale of the equipment to be in a “commercially reasonable” manner. This can be either by public sale (like an auction or on-line service) or by the dealer to a private party.8


Al-


though a sale from a dealer to a private party may be cheaper and easier, it also has the greatest possibility for challenge by the customer or a prior lien holder. Accordingly, we recommend that a public sale be the method of disposition.


Upon sale the proceeds are distributed as follows9 :


• To prior lienholders to the extent of ALL of their prior liens; THEN • To the dealer to the extent of the amount due; THEN • To the customer/owner of the property


It is entirely possible that because of prior liens (including a bank’s “blanket” lien) the sale of the equip- ment will not provide any funds to the dealer. If the sale of the equipment does not produce sufficient funds to pay the dealer, the dealer could still sue the customer to recover the deficiency.


Getting paid is ALWAYS a tricky matter. If your customer doesn’t pay you for the parts and services you have provided them, you have the right to sell the equipment you worked on. In order to exercise this right, it is necessary to strictly comply with ALL of the applicable statutory procedures and requirements.


If you need assistance on this, or other legal matters, contact Samuel I. Kreamer, J.D., C.P.A. of the Kreamer Law Firm, P.C. at 515-727-0900 or at sikkdcpa@kreamerlaw.com.


7


8 9


Nebraska Uniform Commercial Code 9-612(b) does indicate that 10 days before sale is “reasonable” but also provides at Nebraska Uniform Commercial Code 9-612(a) that the reasonableness of the notification time is a question of fact. Iowa does not have a similar statutory provision.


Nebraska Uniform Commercial Code 9-610(b) and Iowa Code §554.7308(1) Nebraska Revised Statute 52-203 and Iowa Code §577.1


Nov/Dec | The Retailer Magazine | 23


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32