CHAPTER 1. LICENSING OF RETAIL DISTRESS SALES

IC 25-18
    ARTICLE 18. REGULATION OF DISTRESS SALES

IC 25-18-1
    Chapter 1. Licensing of Retail Distress Sales

IC 25-18-1-1
Definitions
    Sec. 1. For the purpose of this chapter:
    "Going out of business sale" is a sale held out, advertised orotherwise represented to the public in such a manner as to cause thepublic reasonably to believe that upon disposal of the stock of goodson hand the business will cease and be discontinued, including butnot limited to the following sales: Insurance, salvage, closing out,going out of business, liquidation, bankrupt, receiver's, mortgage,insolvent, assignee's, executor's, administrator's, trustee's or creditor'ssale of goods, wares or merchandise.
    "Removal of business sale" is a sale held out, advertised orotherwise represented to the public in such a manner as to cause thepublic reasonably to believe that the person, firm, limited liabilitycompany, corporation, or association conducting the sale will ceaseand discontinue business at the place of sale upon disposal of thestock of goods on hand and will then move to and resume businessat a new location.
    "Fire or other altered goods sale" is a sale held out, advertised orotherwise represented to the public in such a manner as to cause thepublic reasonably to believe that the sale will offer goods damagedor altered by fire, smoke, water, vandalism or other similar means.
    "Selling at retail" is the sale of tangible personal property toultimate users or consumers.
    "Distress sale" shall mean a going out of business sale, a removalof business sale or a fire or other altered goods sale or anycombination of the same.
    "Goods" shall mean goods, wares, merchandise or other tangiblepersonal property.
(Formerly: Acts 1965, c.271, s.1.) As amended by Acts 1982,P.L.154, SEC.62; P.L.8-1993, SEC.386.

IC 25-18-1-2
Necessity of license; exceptions
    Sec. 2. Unless a license for such sale has been issued and hasbecome effective in accordance with this chapter, no person, firm,limited liability company, corporation, or association engaged in thebusiness of selling goods at retail shall directly or indirectlyadvertise, or cause to be advertised, represent, or cause to berepresented, or hold out to the public in any manner that any sale ofgoods is a going out of business, removal of business, or fire or otheraltered goods sale, or that it is a sale of goods that have beenobtained through, as a result of, or by reason of any of the situationsand contingencies named in the definitions of going out of business

sale, removal of business sale and fire or other altered goods sale asset forth in section 1 of this chapter; however, this chapter shall notapply to any sales directly ordered by any court or referee inbankruptcy, or to any person acting under the direction andsupervision of state or federal courts in the course of their officialduties.
(Formerly: Acts 1965, c.271, s.2.) As amended by Acts 1982,P.L.154, SEC.63; P.L.8-1993, SEC.387.

IC 25-18-1-3
Application for license
    Sec. 3. (a) Any person, firm, limited liability company,corporation, or association required to obtain a license as providedin section 2 of this chapter shall make to the clerk of the circuit courtfor the county in which he proposes to conduct such going out ofbusiness sale, or removal of business sale or fire or other alteredgoods sale an application for such license in writing and under oath,at least ten (10) days prior to the opening date of such sale. Suchapplication shall be submitted on paper sized eight and one-half (8½)inches by eleven (11) inches in accordance with the followinggeneral form setting out the following facts and informationregarding such proposed sale:
    APPLICATION FOR LICENSE FOR
    DISTRESS SALE
    DATE OF APPLICATION: _______________
Applicant's Name: ______________________
Place of Proposed Sale: ___________________
Proposed Opening Date of Sale: _______________
Date of Establishment of Business
at Present Location: _____________________
TYPE OF SALE (CHECK):
[] GOING OUT OF BUSINESS SALE
[] REMOVAL OF BUSINESS SALE
[] FIRE OR OTHER ALTERED GOODS SALE
    1. Reason for sale:
    (A full explanation with regard to the insurance, salvage, removal,closing out, going out of business, liquidation, bankruptcy,receivership, mortgage, insolvency, assignment, executor's,administrator's, trustee's, creditor's, or other necessity which is theoccasion for such sale, or
    If the sale is to be conducted as a sale of goods damaged or alteredby fire, smoke, water, vandalism or otherwise, then a statement as tothe time, location, and circumstances of such damage.)
    2. Name of owner or owners of goods if other than the applicant:
    3. Prior distress sales:
    (A statement of the dates and locations of all going out ofbusiness sales, removal of business sales and fire or other alteredgoods sales conducted during the three (3) years preceding theproposed sale by the applicant or by any person, firm, limitedliability company, corporation, or association related or affiliated

with the applicant.)
    Oath. Such application shall bear the following oath which shallbe subscribed and sworn to before a notary public: " ____________(name of affiant), being first duly sworn, upon his oath states that thematters and facts set forth in this application and in the inventoryfiled with this application are true and correct."
    For the purpose of determining related or affiliated persons, firms,corporations, limited liability companies, or associations under thischapter, the following standards shall apply:
        (1) A person shall be deemed related to his spouse and to allpersons related within the third degree of consanguinity to himor to his spouse.
        (2) Persons shall be deemed related to firms, limited liabilitycompanies, corporations, and associations; and firms, limitedliability companies, corporations, and associations shall bedeemed related to persons, if such persons, or persons related tothem, possess more than a ten per cent (10%) ownership interestin the firm, limited liability company, corporation, orassociation.
        (3) Firms, limited liability companies, corporations, orassociations shall be deemed related if they have in common aperson, group of related persons, firm, limited liabilitycompany, corporation, or association possessing more than tenper cent (10%) ownership in each.
        (4) The ownership interest for purposes of this chapter shall bedetermined as of the dates of any sales hereby required to bestated.
    (b) A full detailed and complete inventory of the goods that are tobe sold shall be filed with the application on the following formwhich shall be typewritten or printed legibly and submitted on papersized eight and one-half (8 1/2) inches by eleven (11) inches:

INVENTORY FOR DISTRESS SALE

Name of Retailer: __________________________________
Place of Sale ________________________________ Quantity

Description Unit Price Per

Unit Total Amount

    (Each type of goods shall be described on a separate line as it wasdescribed on the invoice of purchase by the applicant and the goodsshall be valued at their sale prices.)
    (c) All such invoices of purchase by the applicant shall beretained by the applicant during the sale and for sixty (60) daysfollowing the conclusion of the sale, shall be open to publicexamination and shall be admissible in evidence in any courtproceeding under this chapter. It shall be a violation of this chapterto destroy or otherwise dispose of such invoices during the period ofretention required by this chapter or to destroy or otherwise disposeof such invoices for purposes of evading the requirements of thischapter. If there was no invoice for any goods to be sold, or if theinvoice has previously been destroyed, the applicant shall so state,and shall describe the goods with reasonable specificity according to

the customary description of the type of goods on the invoice ofpurchase by a retailer.
(Formerly: Acts 1965, c.271, s.3.) As amended by Acts 1982,P.L.154, SEC.64; P.L.8-1993, SEC.388; P.L.4-1994, SEC.9.

IC 25-18-1-4
Effective period for license
    Sec. 4. (a) The clerk of the circuit court shall note on the licensethe effective date thereof, which shall be not less than ten (10) daysnor more than fifteen (15) days from the date of the issuance of thelicense. At the time of the issuance of the license, the applicant shallbe entitled to select the effective date within such five (5) day period.
    (b) A license issued under this chapter, unless renewed asprovided in section 9 of this chapter, shall expire and shall be nulland void sixty (60) days after the effective date thereof, as noted onthe license, Sundays and holidays excluded. No distress sale forwhich a license has been granted shall be continued as a distress saleafter the expiration of the license.
(Formerly: Acts 1965, c.271, s.4.) As amended by Acts 1982,P.L.154, SEC.65.

IC 25-18-1-5
Copy of inventory form; filing
    Sec. 5. A copy of the completed inventory form shall be filed withthe clerk of the circuit court and shall be open to public inspection.Such inventory forms shall be kept on file by the clerk for one (1)year and thereafter may be destroyed.
(Formerly: Acts 1965, c.271, s.5.) As amended by P.L.4-1994,SEC.10.

IC 25-18-1-6
Issuance of license; license fee; contents of license
    Sec. 6. (a) The clerk of the circuit court, upon receiving anapplication for a license, shall examine the application to determineif it is in due form. If the clerk shall be satisfied that the applicationis in due form and that the proposed sale is of the character which theapplicant desires to advertise and conduct, the clerk shall issue alicense to the applicant authorizing him to advertise and conduct asale of the particular kind mentioned in the application upon thepayment of a fee as provided in IC 33-32-5-2.
    (b) Such license may be issued by the clerk in typewritten letterform or in printed form addressed to the applicant, one (1) copybeing retained by the clerk, and shall set forth the followinginformation and statements:

DISTRESS SALE LICENSE

    In accordance with and subject to IC 25-18-1, (name of applicant)is hereby licensed to conduct a distress sale for the followingpurpose:
    Going out of business sale    []
    Removal of business sale    []    Fire or altered goods sale    []
This license shall apply only to the sale of goods reported in theinventory filed with the application for this license, which goods areto be sold by the licensee at (place of sale _______), in _______,Indiana. The effective date of this license shall be _______,_______, and this license shall expire sixty (60) days from said date,Sundays and holidays excluded.
    Dated this ____ day of _________, ______.

____________ CLERK.

(Formerly: Acts 1965, c.271, s.6.) As amended by Acts 1982,P.L.154, SEC.66; P.L.171-1984, SEC.8; P.L.98-2004, SEC.99.

IC 25-18-1-7
Record of license
    Sec. 7. The clerk of the circuit court shall endorse upon each suchapplication the date of its filing and shall preserve it as a publicrecord of his office and shall make a notation of it in a book to bekept for that purpose, properly indexed, showing the name of theapplicant, the date of the application, the descriptive name of theproposed sale, the place where such sale is to be conducted, the dateof issuance of the license and the effective date thereof.
(Formerly: Acts 1965, c.271, s.7.)

IC 25-18-1-8
Display of license
    Sec. 8. A copy of the application, including the inventory, andlicense as herein described, shall be posted at a location conspicuousto the public in the place where such goods are to be sold so that thepublic may be informed of the facts in relation to the goods beforepurchasing same.
(Formerly: Acts 1965, c.271, s.8.)

IC 25-18-1-9
Renewal
    Sec. 9. A license may be renewed for an additional thirty (30) days,Sundays and holidays excluded, if an application for renewal is filedwith the clerk prior to the expiration of such license but not soonerthan ten (10) days in advance of such expiration date; Provided,however, That a license may be renewed only if more than twohundred thousand dollars ($200,000) worth of goods were stated onthe inventory originally filed. Upon proper applications the clerk mayissue successive renewal licenses, one such renewal license for eachtwo hundred thousand dollars ($200,000) worth of goods as stated onthe inventory originally filed. A license shall be renewable only if inrespect to each renewal the clerk finds that facts exist justifying thelicense renewal, that the licensee has filed an application for renewal,that the licensee has submitted with the application for renewal arevised inventory showing the items listed on the original inventoryremaining unsold and not listing any goods not included in theoriginal inventory, and that the licensee has paid an additional fee for

the renewal according to the schedule in section 4 based on therevised inventory filed with the renewal application. The renewallicense shall be of the form prescribed in section 6, except that itshall expire thirty (30) days from its effective date, Sundays andholidays excluded, which shall be the expiration date of the priorlicense. The application for a renewal license shall be under oath andshall be of the same form as the application form prescribed insection 3, except that it shall at the bottom set forth the factsjustifying the renewal.
(Formerly: Acts 1965, c.271, s.9.)

IC 25-18-1-10
Addition to stock
    Sec. 10. No person, firm, limited liability company, corporation, orassociation, in contemplation of conducting any sale regulated bythis chapter, shall order any goods for the purpose of selling anddisposing of the goods at such sale. However, the prohibition of thissection shall not apply to the purchase of goods damaged or alteredby fire, smoke, water, vandalism or other similar means, or goodspurchased from a seller who has discontinued his business. In theevent of any unusual purchase or addition to the stock of goodswithin sixty (60) days prior to the filing of the application for licenseto conduct such sale, the burden in all civil or criminal litigation shallfall upon the purchaser to show that such purchases and additions tothe stock were not made in contemplation of such sale or for thepurpose of selling the goods at such sale.
(Formerly: Acts 1965, c.271, s.10.) As amended by Acts 1982,P.L.154, SEC.67; P.L.8-1993, SEC.389.

IC 25-18-1-11
Identification of goods
    Sec. 11. The license provided for herein shall be granted, and validonly for the sale of inventoried goods which are the property of thelicensee. Commingling of additional or other goods with that shownin the inventory in such a manner as to cause the merchandiseinventoried to lose its identity shall void any such license and be aviolation of this chapter. If the inventoried goods shall be put on salewith other stock of goods of an established merchant, then the sameshall be considered and deemed to be commingled, unless it is clearlyand sufficiently segregated, marked or identified, and advertised sothat its identity may be readily distinguished from such other stockof goods and its identity readily ascertained.
(Formerly: Acts 1965, c.271, s.11.) As amended by Acts 1982,P.L.154, SEC.68.

IC 25-18-1-12
Misstatement or omission in license
    Sec. 12. Any license issued on the basis of an application orcontaining any material misstatement or omission, or an inventorynot in compliance with this chapter shall be void and of no effect.(Formerly: Acts 1965, c.271, s.12.) As amended by Acts 1982,P.L.154, SEC.69.

IC 25-18-1-13
Violation of certain act; voiding license
    Sec. 13. Any violation of IC 35-43 by a seller in connection witha sale governed by this chapter also constitutes a violation of thischapter and automatically voids any license authorizing such a sale.
(Formerly: Acts 1965, c.271, s.13.) As amended by Acts 1978, P.L.2,SEC.2535.

IC 25-18-1-14
Establishment of business to hold distress sale
    Sec. 14. No license for a going out of business sale or a removal ofbusiness, as provided in this chapter, shall be issued to any person,firm, limited liability company, corporation, or association if suchbusiness was established or relocated for the ultimate purpose ofholding such sale. For the purpose of this section, it shall bepresumed by the clerk that any business which has been maintainedat the sale location less than six (6) months was established for suchultimate purpose. The applicant may in his application rebut suchpresumption by establishing to the satisfaction of the clerk factsshowing that such business was not established for the ultimatepurpose of holding such distress sale.
(Formerly: Acts 1965, c.271, s.14.) As amended by Acts 1982,P.L.154, SEC.70; P.L.8-1993, SEC.390.

IC 25-18-1-15
Goods previously inventoried for distress sale
    Sec. 15. Nothing in this chapter contained shall be construed asauthorization for the issuance of a license to a person, firm, limitedliability company, corporation, or association if the goods to be soldor any part of them were goods inventoried in an application for alicense under this chapter, which license was issued within thepreceding year.
(Formerly: Acts 1965, c.271, s.15.) As amended by Acts 1982,P.L.154, SEC.71; P.L.8-1993, SEC.391.

IC 25-18-1-16
Limitations on issuance of license; three-year period
    Sec. 16. (a) No license for a going out of business or a removal ofbusiness sale shall be issued in respect to a proposed sale to be heldby the applicant if the applicant or any person, firm, limited liabilitycompany, corporation, or association related to the applicant hasconducted a going out of business sale or removal of business sale atthe proposed sale location within the last preceding three (3) years.
    (b) No license for a going out of business or a removal of businesssale shall be issued to any applicant if such applicant or any relatedperson, firm, limited liability company, corporation, or associationhas conducted a going out of business or removal of business sale

within the last preceding three (3) years unless the business forwhich such license is sought has been conducted for more than one(1) year by the applicant or a related person, firm, limited liabilitycompany, corporation, or association at the location of the proposedsale.
    (c) Any license obtained in violation of this section shall be voidand of no force and effect.
(Formerly: Acts 1965, c.271, s.16.) As amended by P.L.8-1993,SEC.392.

IC 25-18-1-17
Maintenance of records during sale
    Sec. 17. Any licensee under this chapter shall keep suitable salesrecords and books during the sale, at the location at which such saleis conducted. Such records and books shall be open for inspection bythe clerk of the circuit court or the prosecutor for the county in whichthe sale is conducted or the duly authorized representative of eitherof them.
(Formerly: Acts 1965, c.271, s.17.) As amended by Acts 1982,P.L.154, SEC.72.

IC 25-18-1-18
Compliance with chapter; duties of clerk of court
    Sec. 18. It shall be the duty of the clerk of the circuit court to seethat the provisions of this chapter are strictly complied with and toreport for prosecution all cases of violation of, or refusal or neglectto comply with, such provisions. It shall be unlawful for any person,firm, limited liability company, corporation, or association to whoma license has been granted under this chapter to refuse to furnish saidclerk on demand or to any person designated by him for that purpose,all the facts connected with the sale for which such license wasgranted or any other information which he may require in theenforcement of this chapter.
(Formerly: Acts 1965, c.271, s.18.) As amended by Acts 1982,P.L.154, SEC.73; P.L.8-1993, SEC.393.

IC 25-18-1-19
Misrepresentation
    Sec. 19. A person who, in procuring from the clerk a license toconduct a sale under this act, knowingly misrepresents the truedescription or character of the sale, or the kind or condition of goodsto be sold, or who otherwise knowingly violates this chapter,commits a Class A misdemeanor.
(Formerly: Acts 1965, c.271, s.19.) As amended by Acts 1978, P.L.2,SEC.2536.

IC 25-18-1-20
Repealed
    (Repealed by Acts 1978, P.L.2, SEC.2570.)
IC 25-18-1-21
Right to injunction or treble damages
    Sec. 21. Any person injured by any violation of this chapter maysue for such injury in the courts of any county in which the defendantsells at retail, and obtain either injunctive relief against any saleconducted in violation of this chapter or recover threefold thedamages sustained, or both, and such damages shall include areasonable attorney's fee. The fact of injury to the plaintiff but notthe amount thereof shall be conclusively presumed if it is establishedthat a violation has taken place and that the plaintiff and defendanteach were engaged in selling at retail within the same county at thetime of the claimed violation, and that the violation of this chapterrelated to a sale conducted by the defendant in such county.
(Formerly: Acts 1965, c.271, s.21.) As amended by Acts 1982,P.L.154, SEC.74.

IC 25-18-1-22
Duties of prosecuting attorney
    Sec. 22. It shall be the duty of the prosecuting attorney of anycounty to prosecute any violation of this chapter. The prosecutingattorney of any county may in the alternative seek injunctive reliefagainst any sale being carried on in violation of this chapter in a civilaction in any circuit or superior court of the county in which thedefendant is conducting such sale. The prosecuting attorney mayrequest and the court may, in its discretion, after a hearing, issue apreliminary injunction, pending the determination of such civilaction, against continued representations to the public by the seller,that the sale is a going out of business sale, removal of business sale,or fire or other altered goods sale.
(Formerly: Acts 1965, c.271, s.22.) As amended by Acts 1982,P.L.154, SEC.75.