Section effective November 19, 2017.

1. (A) If a dealer desires to make a change in ownership by the sale of the business assets, stock transfer, or otherwise, the dealer shall give the manufacturer written notice at least fifteen business days before the closing, including all supporting documentation as may be reasonably required by the manufacturer to determine if an objection to the sale may be made. In the absence of a breach by the selling dealer of its dealer agreement or this chapter, the manufacturer shall not object to the proposed change in ownership unless the prospective transferee:

   1. (1) has previously been terminated by the manufacturer for breach of its dealer agreement;
   2. (2) has been convicted of a felony or any crime of fraud, deceit, or moral turpitude;
   3. (3) lacks any license required by law;
   4. (4) does not have an active line of credit sufficient to purchase a manufacturer's product; or
   5. (5) has undergone in the last ten years bankruptcy, insolvency, a general assignment for the benefit of creditors, or the appointment of a receiver, trustee, or conservator to take possession of the transferee's business or property.
2. (B) If the manufacturer objects to a proposed change of ownership, the manufacturer shall give written notice of its reasons to the dealer within ten business days after receipt of the dealer's notification and complete documentation. The manufacturer has the burden of proof with regard to its objection. If the manufacturer does not give timely notice of its objection, the change or sale shall be deemed approved.

3. (C) It is unlawful for a manufacturer to fail to provide a dealer an opportunity to designate, in writing, a family member as a successor to the dealership in the event of the death, incapacity, or retirement of the dealer. It is unlawful to prevent or refuse to honor the succession to a dealership by a family member of the deceased, incapacitated, or retired dealer unless the manufacturer has provided to the dealer written notice of its objections within ten days after receipt of the dealer's modification of the dealer's succession plan. In the absence of a breach of the dealer agreement, the manufacturer may object to the succession for the following reasons only:

   1. (1) conviction of the successor of a felony or any crime of fraud, deceit, or moral turpitude;
   2. (2) bankruptcy or insolvency of the successor during the past ten years;
   3. (3) prior termination by the manufacturer of the successor for breach of a dealer agreement;
   4. (4) the successor lacks an active line of credit sufficient to purchase the manufacturer's recreational vehicles; or
   5. (5) the successor lacks any license required by law.
4. (D) The manufacturer has the burden of proof regarding its objection. However, a family member may not succeed to a dealership if the succession involves, without the manufacturer's consent, a relocation of the business or an alteration of the terms and conditions of the manufacturer/dealer agreement.

HISTORY: 2017 Act No. 51 (S.321), Section 1, eff November 19, 2017.

Editor's Note

2017 Act No. 51,Sections 6, 7, provide:

"SECTION 6. The department is authorized to promulgate regulations for the enforcement of the provisions of Chapter 14, Title 56.

"SECTION 7. This act takes effect six months after approval by the Governor and applies to manufacturer/dealer agreements entered into on or after July 1, 2018."