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Multiple Choice

Under bulk sale law, within how many days must a claim be filed to be valid?

Bulk sale law protects creditors when a business is sold in bulk by giving them a window to file claims against the sale proceeds. In California, a claim must be filed within one year from the date of the bulk sale to be valid. This one-year deadline ensures creditors have a fair chance to assert their interests while giving the buyer and escrow a predictable timeframe to set aside or satisfy those claims. Claims filed after that period are typically barred from the sale proceeds, which is why one year is the correct timeframe. Shorter deadlines would risk some creditors losing recourse, while longer ones would add uncertainty for the buyer and escrow.

Bulk sale law protects creditors when a business is sold in bulk by giving them a window to file claims against the sale proceeds. In California, a claim must be filed within one year from the date of the bulk sale to be valid. This one-year deadline ensures creditors have a fair chance to assert their interests while giving the buyer and escrow a predictable timeframe to set aside or satisfy those claims. Claims filed after that period are typically barred from the sale proceeds, which is why one year is the correct timeframe. Shorter deadlines would risk some creditors losing recourse, while longer ones would add uncertainty for the buyer and escrow.