In a bulk sales transaction where the sale proceeds will be less than the amount owing to the creditors, the proper procedure for a buyer is to
A) obtain consent to the terms of the transaction from the minimum proportion of creditors as set out in the Bulk Sales Act.
B) pay the sale proceeds to a trustee appointed by the seller.
C) distribute the sale proceeds pro rata to the creditors.
D) pay the sale proceeds to the seller.
E) pay the sale proceeds to a trustee appointed by the buyer(s).

Question

Quizplus · Accepted Answer

The Bulk Sales Act typically requires the buyer to obtain consent from a certain proportion of creditors to ensure that the transaction is fair and that creditors are aware of and agree to the terms, especially when proceeds are insufficient to cover debts.

In a Bulk Sales Transaction Where the Sale Proceeds Will