This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.
A common Florida deal pattern looks like this. A buyer agrees to acquire the assets of an operating business — inventory, equipment, the customer list, the name over the door — and structures the deal as an asset purchase precisely so it does not inherit the seller’s liabilities. The lawyers paper the reps, the buyer wires the money, and everyone goes home. Then, three months later, a supplier the seller never paid shows up looking at the same inventory it shipped on credit, now sitting in the buyer’s warehouse, and asks the obvious question: where is my money, and why does the company that owes me no longer own anything?
For most of the twentieth century, there was a statute built to answer that question before it became a lawsuit. It was the bulk-sales law — Article 6 of the Uniform Commercial Code — and Florida, like the large majority of states, repealed it. The repeal was not controversial and did not make the trade press. But it quietly removed a layer of buyer-and-creditor protection that a lot of asset-deal lawyers still half-believe is there, and the gap it left has to be filled by other tools that do not fill it automatically.
What the bulk-sales law actually did
The old bulk-transfer regime was a notice statute. When a business sold a major part of its inventory outside the ordinary course — a bulk sale — the buyer had an affirmative duty to demand a list of the seller’s creditors and to notify those creditors of the pending sale, usually ten days before taking possession or paying. If the buyer skipped the notice, the transfer was ineffective against the seller’s creditors. In practical terms, the unpaid supplier could treat the inventory as though the seller still owned it and reach it in the buyer’s hands.
That is a blunt instrument, and it is exactly why the Uniform Law Commission recommended repealing it in 1989. The drafters concluded that bulk-sales law solved a nineteenth-century problem — the merchant who sold out overnight and vanished — that modern credit reporting, fraudulent-transfer law, and secured-transactions law already addressed, while imposing real friction on every legitimate sale. Florida agreed and let it go. Today a Florida asset buyer has no statutory duty to notify the seller’s trade creditors, and a creditor who gets stiffed cannot point to a missed bulk-sale notice as the hook.
The protection did not vanish — it scattered
Here is the part that trips people up. Repealing the bulk-sales statute did not abolish the underlying risk that the seller’s creditors go unpaid while the assets move to a new owner. It scattered the protection across three other bodies of law, none of which is self-executing the way a notice statute is. A buyer who assumes the repeal means “no creditor can follow these assets” has misread the situation badly.
First, there is Florida’s fraudulent-transfer law. Chapter 726 of the Florida Statutes — the Uniform Fraudulent Transfer Act as Florida adopted it — lets a creditor unwind a transfer made with intent to hinder, delay, or defraud, or made for less than reasonably equivalent value while the seller was insolvent or about to become so. An asset sale at a real, market-tested price is generally safe. An asset sale at a suspiciously low number, to an insider, with the proceeds disappearing rather than going to creditors, is the textbook fact pattern a Chapter 726 claim is built for. The buyer who paid a bargain price to a struggling seller has not bought peace; it has bought a clawback argument.
Second, there is tax successor liability, which does not care whether the deal was fair. Under the sales-tax successor rules, a buyer of business assets can be held liable for the seller’s unpaid sales-and-use tax unless it withholds enough of the purchase price to cover the liability or obtains a clearance showing the account is current. That exposure runs independent of fraudulent-transfer analysis and independent of how clean the price was. It is the single most common way a Florida asset buyer inherits a liability it thought it had structured around, which is why the tax-clearance certificate belongs on every asset-deal closing checklist rather than as an afterthought.
Third, there is common-law successor liability — the de facto merger and mere-continuation doctrines. Florida’s default rule is that an asset buyer does not assume the seller’s debts, but the exceptions swallow more than buyers expect: where the buyer is really just the old business in a new wrapper, with the same owners, the same management, and the same operations, courts will treat it as the successor regardless of how the paper reads. The repeal of bulk-sales law did nothing to soften those doctrines; if anything, it makes them the main event, because they are now the principal route a creditor uses to follow assets into a new owner’s hands.
What replaces the notice statute in practice
If the statute will not protect the buyer automatically, the contract and the diligence have to. The good news is that the tools are well understood; the bad news is that they only work if someone actually runs them, and the discipline of the old mandatory notice is gone.
The starting point is a real lien and judgment search. A buyer should pull UCC-1 financing statements against the seller under Article 9, search for recorded judgments and tax liens, and get payoff or estoppel letters for anything that turns up before the wire goes out. A perfected secured creditor follows its collateral into the buyer’s hands without needing any bulk-sale theory at all — that is what perfection means — so the search is not optional housekeeping; it is the difference between buying assets and buying assets that already belong, in part, to someone else.
Next is the allocation of risk in the purchase agreement itself. The seller’s representation that there are no undisclosed liabilities, the covenant to pay creditors out of the proceeds, the indemnity backed by a holdback or escrow, and — where the numbers justify it — a portion of the price held back specifically against trade payables and tax exposure: these are the contract-side substitutes for the notice the statute used to require. The escrow does the work the ten-day creditor notice used to do, with the advantage that it is sized to the actual risk rather than to a one-size statutory deadline. The seller-friendly and buyer-friendly versions of these clauses pull in predictable directions, and a Florida asset buyer that leaves them generic is leaving the protection the legislature took away on the table.
None of this guarantees a buyer never sees the unpaid supplier at the loading dock. The point is narrower and more useful: the bulk-sales statute is gone in Florida, the risk it managed is not, and the buyer who treats the repeal as a reason to relax has it exactly backwards. The repeal moved the protection from a statute that ran on autopilot to a set of diligence and drafting steps that run only when someone insists on them. On a Florida asset deal, that someone has to be you.
For the deeper structural questions — when an asset deal is the right call at all, and how successor-liability exposure interacts with the way the transaction is papered — our M&A practice and our work on corporate governance walk through the trade-offs, and the broader map of seller-friendly versus buyer-friendly deal terms shows where the risk allocation usually lands. The authoritative text of Florida’s fraudulent-transfer chapter is available from the Florida Legislature.
If you are working through a Florida asset purchase and trying to think through successor-liability and creditor exposure on either side, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
