(1) If a dealer desires to make a change in ownership by the sale of business assets, stock transfer, or otherwise, the dealer shall give the manufacturer or distributor written notice at least 10 business days before the clos- ing, along with all supporting documentation as may be reasonably required by the manufacturer or distributor 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 subchapter, the manufacturer or distributor may not object to the proposed change in ownership unless any of the following applies to the prospective transferee: (a) The transferee has previously been terminated for cause by the manufacturer. (b) The transferee has been convicted of a felony or any crime of fraud, deceit, or moral turpitude. (c) The transferee lacks any license required by law. (d) The transferee does not have an active line of credit sufficient to purchase a manufacturer’s product. (e) The transferee has undergone in the last 10 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) If a manufacturer or distributor objects to a proposed change in ownership, the manufacturer or distributor shall give written notice of its reasons to the dealer within 7 business days after receipt of the dealer’s notification and complete documentation. The manufacturer or distributor has the burden of proof with regard to its objection. If the manufacturer or distributor does not give timely notice of its objection, the change, sale, or transfer shall be approved. (3) (a) A manufacturer or distributor shall 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. A manufacturer or distributor may not prevent or refuse to honor the succession unless the manufacturer or distributor has provided to the dealer written notice of its objections within 10 business 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 only for any of the following reasons: 1. Conviction of the successor of a felony or any crime of fraud, deceit, or moral turpitude. 2. Bankruptcy or insolvency of the successor during the past 10 years. 3. Prior termination by the manufacturer of the successor for breach of a dealer agreement. 4. The lack of an active line of credit for the successor sufficient to purchase the manufacturer’s product. 5. The lack of any license for the successor required by law. (b) The manufacturer or distributor has the burden of proof regarding its objection. A family member may not succeed to a dealership if the succession involves, without the manufacturer’s or distributor’s consent, a relocation of the business or an alteration of the terms and conditions of the dealer agreement.
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