CHAPTER 6.16
BANKRUPTCY SALES
6.16.010 Definitions.
For the purposes of this chapter, the following words and phrases shall have the meanings respectively ascribed to them by this section:
A. "Advertise" means any and all means, whether verbal or written, used for conveying to the public or any part thereof, notice of the conduct of a closeout sale, fire sale or bankruptcy sale as defined in this section, or notice of intention to conduct such sale;
B. "Bankruptcy sale" means any sale of, or offer to sell, to the public or any part thereof, goods, wares or merchandise in stock which have been involved in any business failure or have been derived from any business which has been adjudicated bankrupt, has been closed, has been discontinued, has been liquidated or has been placed in receivership;
C. "Close-out sale" means any sale of, or offer to sell to the public or any part thereof, goods, wares or merchandise in stock, in furtherance of a declared purpose, as advertised, when such sale is anticipatory of or to avoid the termination, liquidation, revision, windup, discontinuance, removal, relocation, dissolution, closing or abandonment of a business conducted at any location;
D. "Fire sale" means any sale of, or offer to sell to the public or any part thereof, goods, wares or merchandise in stock which has been damaged as the result of contact with, or exposure to, fire, smoke or water;
E. "Permit" means a permit issued pursuant to this chapter;
F. "Permittee" means any person, firm, association or corporation to whom a permit has been issued pursuant to this chapter;
G. "Person" means an individual, firm, association, corporation or partnership, or the agent of any of the aforesaid.
The paragraphs of this section defining bankruptcy sale, close-out sale and fire sale shall apply to any and all sales advertised in such manner as to convey to the public, or to that portion of the public to which such advertising is directed, the belief that upon disposal of the goods to be placed on sale, the business or that portion thereof being conducted at any location will cease, be removed or relocated. (Ord. 850 NCS §1: prior code §5.28.)
6.16.020 False advertising deemed unlawful.
It is unlawful for any person to advertise or otherwise represent to the public or any part thereof, in any manner, a reduction in price of any goods, wares, merchandise, service, facility or accommodation, whether such price reduction be represented in complete price figures or by percentage reduction, unless the price from which the reduction is calculated is the price customarily charged by applicant for the goods, wares, merchandise, service, facility or accommodation so offered to the public. (Ord. 850 NCS §1: prior code §5.29.)
6.16.030 Permit required.
It is unlawful for any person to advertise or conduct a close-out sale, fire sale or bankruptcy sale, as defined in Section 6.16.010 without first obtaining a permit therefor from the city tax and license collector in the manner hereinafter provided. (Ord. 850 NCS §1: prior code §5.30.)
6.16.040 Exemptions.
The provisions of this chapter shall not apply to or affect the following persons:
A. Persons acting in their official capacities as public officials;
B. Persons acting pursuant to process issued by a court of competent jurisdiction;
C. Duly licensed auctioneers, selling at auction other than at a closeout sale;1
D. Any publisher of a newspaper, magazine or other periodical or publication, who publishes in good faith any advertisement without knowledge of its false, deceptive or misleading character, or without knowledge that compliance has not been had with the provisions of this chapter. (Ord. 850 NCS §1: prior code §5.31.)
6.16.050 Interval between sales.
Any person who has held a sale, regulated under this chapter, at the same location as stated in the application, within one year preceding the date of the application, shall not be granted a permit. (Ord. 850 NCS § 1: prior code §5.32.)
6.16.060 Restricted operation of permit.
In the event a person applying for a permit under this chapter operates more than one place of business, any permit issued under this chapter shall apply only to the one store for which application is made, and no other store or branch shall advertise or represent that it is cooperating with it or in any way participating in such sale, nor shall the store at which such sale is conducted advertise or represent that any other store or branch is cooperating with it or participating in any way in such sale. (Ord. 850 NCS §1: prior code §5.33.)
6.16.070 Application for permit — Contents.
Any person desiring to advertise and conduct a sale regulated by this chapter shall make a written application therefor, under oath, accompanied by a fee in the sum of fifty dollars, to the city tax and license collector, setting forth and containing the following information:
A. The true name and address of the owner of the goods, wares or merchandise to be the subject of the sale;
B. The true name and address of the person from whom the applicant purchased the goods, wares or merchandise to be sold and the price thereof, or, if not purchased, the manner of acquisition. The price at which such goods were offered for sale to the public immediately prior to such application;
C. The address of the place where such sale is to be held;
D. The nature of the occupancy of applicant at that place where the sale is to be conducted whether by lease, sublease or otherwise, and the effective date of termination of such occupancy;
E. The dates when the sale is to be conducted;
F. A full and complete statement of the facts relating to the sale, including the reason for the urgent and expeditious disposal of goods, wares or merchandise thereby, and the manner in which the sale will be conducted;
G. The means proposed to be employed in advertising such sale, together with the proposed content of such advertising, if any;
H. An itemized stock list of inventory of the goods, wares and merchandise to be offered for sale, together with the cost at which the same were obtained by the owner thereof or the person conducting the sale. All goods, wares and merchandise listed upon the inventory herein required shall be so described in detail by manufacturer’s name and lot number, the number of articles so described, colors, sizes and otherwise, that the identity of such goods with the goods listed on such inventory can be readily determined.
1. All goods included in such inventory shall have been purchased by the applicant for resale on bona fide orders without cancellation privileges, in the ordinary course of business, and shall not comprise goods held on consignment,
2. Such inventory shall not include goods, wares or merchandise ordered in expectation or contemplation of conducting a sale of the type regulated hereby. Any purchase or additions to the stock of goods of the person applying for a permit hereunder within sixty days preceding the filing of an application for a permit hereunder shall be presumed to be a purchase made in expectation or contemplation of a sale as herein regulated. Such presumption may be rebutted by evidence that such purchases or additions were not made in expectation or contemplation thereof,
3. Such inventory shall include only goods which are, at the time such inventory is taken and prepared, on the premises of the applicant and at the location where the sale is proposed to be conducted.
(Ord. 850 NCS §1: prior code §5.34.)
6.16.080 Investigation of applicant for permit — Issuance or denial.
Upon the filing of the application for a permit as provided in Section 6.16.070, the city tax and license collector shall make or cause to be made such examination, audit or investigation of the applicant and his business, history and affairs in relation to the proposed sale as he shall deem necessary. If the city tax and license collector finds that the statements in the application are true, that the inventory is complete and accurate, that the advertising proposed to be used is not false, fraudulent, deceptive or misleading in any respect, that purported price reductions are bona fide, and that the methods proposed to be used by the applicant in conducting the sale are not such as, in his opinion, will work a fraud or deception upon prospective purchasers, he shall recommend the issuance to the applicant of a permit to conduct such sale in conformity with the provisions of this chapter, otherwise, he shall recommend a denial of the application. The city tax and license collector may also refuse to issue a permit to the applicant because of the insufficiency of the information set forth in the application, but in the event of a denial for insufficient information the city tax and license collector shall grant the applicant permission to file an amended application.
No permit may be issued to any applicant who has been convicted of any crime involving fraud or moral turpitude within five years preceding application. The city tax and license collector also may refuse to issue a permit to any person who has heretofore violated any provisions of any ordinance of the city regulating the conduct of sales of the type herein regulated. Upon approval of the application by the city tax and license collector, the application, together with a report of the investigation made pursuant thereto shall be sent to the city manager for approval or disapproval. Upon approval of the application by the city manager, the city tax and license collector shall issue a permit. In no event shall the fee of fifty dollars be returned to the applicant. (Ord. 850 NCS §1: prior code §5.35.)
6.16.090 Terms of permit — Renewal.
Any permit issued under this chapter shall be issued on the following terms:
A. The permit shall authorize the sale described in the application for a period not to exceed thirty consecutive calendar days; provided, that no such sale shall commence until fifteen days shall have passed since the applicant shall have filed his inventory with the city tax and license collector; and provided further, however, that the city tax and license collector, with the approval of the city manager, may upon application therefor, accompanied by a renewal fee of fifty dollars renew such permit for a period not to exceed thirty consecutive calendar days. Such application for renewal shall set forth a complete list of goods, wares or merchandise listed in the original application which remain unsold. No goods, wares or merchandise not listed in the original application may be sold pursuant to any renewal permit granted hereunder. Upon receipt of such application for renewal, the city tax and license collector shall make, or cause to be made, an investigation at once, and if satisfied of the truth of the statements made therein, shall refer the renewal application, together with the attendant investigation report, to the city manager. Upon approval of the renewal application by the city manager, the city tax and license collector shall issue a renewal permit. Only one renewal permit may be issued. In no event shall the fee of fifty dollars be returned to the renewal applicant;
B. The permit shall authorize only the one type of sale described in the application at the location therein described;
C. The permit shall authorize only the sale of the goods, wares or merchandise described in the inventory appended to the application;
D. Any permit or renewal thereof granted as herein provided shall not be assignable or transferable.
(Ord. 850 NCS §1: prior code §5.36.)
6.16.100 Surety bond required.
Any applicant to whom a permit is to be issued under the provisions of this chapter shall submit to the city tax and license collector a corporate surety bond satisfactory to the city, payable to the city, in the penal sum of one thousand dollars conditioned upon compliance with the provisions of this chapter. No permit shall be issued unless and until such bond has been filed with such officer of the city. (Ord. 850 NCS §1: prior code §5.37.)
6.16.110 Duties of permittee.
A permittee under this chapter shall:
A. Make no additions or substitutions whatever to or of the stock of goods, wares or merchandise described in the inventory attached to the application for a permit during the period subsequent to the filing of the inventory and prior to the termination of any sale or renewal thereof herein authorized;
B. Refrain from any false, deceptive or misleading advertising;
C. Conduct such sale in strict conformity to any advertising or holding out relating thereto;
D. Keep available at the place of sale a duplicate copy of the inventory to the application for presentation thereof to inspecting officials upon request therefor;
E. At the close of business each day the stock inventory shall be revised and made current, and items on such list disposed of during such day shall be noted thereon. Suitable books and records as prescribed by the city tax and license collector shall be kept by the permittee and shall be open at all times to inspection by the city tax and license collector or his authorized representatives.
(Ord. 850 NCS § 1: prior code §5.38.)
6.16.120 Sale of additional goods, wares or merchandise prohibited.
No goods, wares or merchandise shall be offered for sale at the place of business where such sale is to be conducted other than those items listed in the inventory filed with the application for the permit. (Ord. 850 NCS § 1: prior code §5.39.)
6.16.130 Revocation of permit.
The city tax and license collector and the chief of police or their authorized representatives shall have the power to revoke at any time any permit granted in accordance with the provisions of this chapter whenever any such sale is being conducted in violation of any of the provisions of this chapter, or in such a manner as to deceive or defraud the public, or if:
A. The holder of any such permit has made any material misstatement in the application for such permit;
B. The holder of any such permit has been guilty of any fraudulent practice or practices in the conduct of the sale authorized by such permit;
C. The holder of any such permit has failed to inventory all the goods, wares or merchandise offered for sale pursuant to such permit;
D. The holder of any such permit has added, or caused or permitted to be added, any goods, wares or merchandise not described in the original inventory and has offered such additions for sale under such permit;
E. The holder of any such permit has violated any of the provisions contained in this chapter.
(Ord. 850 NCS § 1: prior code §5.40.)
Editor’s Note: Prior code §5.31(3) was amended during codification in accordance with the wishes of the city attorney in a letter dated August 3, 1972.