Filene's Basement filed for bankruptcy in May 2009.In November 2009,Filene's Basement started its "going-out-of-business" sale.Is this price discrimination legal?

Question

Quizplus · Accepted Answer

Section 2(a)of the Robinson-Patman Act specifically exempts price discrimination that reflects "changing conditions in the market for or the marketability of the goods." This defense applies to forced judicial sales of the goods (such as during bankruptcy proceedings involving the seller)and to good faith sales by sellers that have decided to cease selling the goods in question.Since Filene's Basement has both filed for bankruptcy and decided to cease selling the goods in question,its "going-out-of-business" sale will fall under the "changing conditions" exemption to Section 2(a)of the Robinson-Patman Act and hence,will be deemed legal.

Filene's Basement Filed for Bankruptcy in May 2009