State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_18B > GS_18B-1119

§18B‑1119.  Supplier's financial interest in wholesaler.

(a)        A supplier or anofficer, director, employee or affiliate of a supplier may financially assist aproposed purchaser in acquiring ownership of a wholesaler's business byparticipation in a limited partnership arrangement in which the supplier,officer, director, employee, or affiliate is a limited partner and the proposedpurchaser seeking to acquire ownership of the wholesaler's business is ageneral partner.  Such limited partnership arrangement may exist for no longerthan eight years.  If the general partner defaults in the agreement with thelimited partner, and the limited partner acquires title to the generalpartner's interest, the limited partner must divest itself of the generalpartner's interest within 180 days.

(b)        A supplier or anofficer, director, employee or affiliate of a supplier may financially assist aproposed purchaser in acquiring ownership of a wholesaler's business by makinga business loan and taking as security the assets of the wholesaler'sbusiness.  The business loan may exist for no longer than eight years.  If thewholesaler defaults on the loan and it is necessary for the supplier to taketitle to the assets of the business, the supplier may operate the business for aperiod not to exceed 180 days, by which time the supplier must divest itself ofthe business.  The supplier may make the subsequent purchaser a business loan,taking as security the assets of the wholesaler's business.  It shall also bepermissible for the wholesaler and supplier to agree on the sale of thewholesaler's business to the supplier, provided that the supplier shall divestitself of the wholesaler's business within 180 days.

(c)        A supplier or anofficer, director, employee or affiliate of a supplier may have a securityinterest in the inventory or property of its wholesaler to secure payment forsuch inventory or other loans for other purposes. (1989, c. 142, s. 2.)