Rep. Lou Lang

Filed: 5/1/2012

 

 


 

 


 
09700SB3399ham001LRB097 18875 JLS 69026 a

1
AMENDMENT TO SENATE BILL 3399

2    AMENDMENT NO. ______. Amend Senate Bill 3399 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Beer Industry Fair Dealing Act is amended
5by changing Section 7 as follows:
 
6    (815 ILCS 720/7)  (from Ch. 43, par. 307)
7    Sec. 7. Reasonable compensation.
8    (1) Subject to the right of any party to an agreement to
9pursue any remedy provided in Section 9, any brewer that
10cancels, terminates or fails to renew any agreement, or
11unlawfully denies approval of, or unreasonably withholds
12consent, to any assignment, transfer or sale of a wholesaler's
13business assets or voting stock or other equity securities,
14except as provided in this Act, shall pay the wholesaler with
15which it has an agreement pursuant to this Act reasonable
16compensation for the fair market value of the wholesaler's

 

 

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1business with relation to the affected brand or brands. The
2fair market value of the wholesaler's business shall include,
3but not be limited to, its goodwill, if any.
4    (1.5) The provisions of this subsection (1.5) shall only
5apply if the brewer agrees to pay reasonable compensation as
6defined in subsection (1) and the total annual volume of all
7beer products supplied by a brewer to a wholesaler pursuant to
8agreements between such brewer and wholesaler represents 10%
915% or less of the total annual volume of the wholesaler's
10business for all beer products supplied by all brewers. For
11purposes of this subsection (1.5) only, "annual volume" means
12the volume of beer products sold by the wholesaler in the
1312-month period immediately preceding receipt of the brewer's
14written offer pursuant to this subsection (1.5).
15    If a brewer is required to pay reasonable compensation as
16described in subsection (1) and the question of reasonable
17compensation is the only issue between the parties, the brewer
18shall, in good faith, make a written offer to pay reasonable
19compensation. The wholesaler shall have 30 days from receipt of
20the written offer to accept or reject the brewer's offer.
21Failure to respond, in writing, to the written offer shall
22constitute rejection of the offer to pay reasonable
23compensation. If the wholesaler, in writing, accepts the
24written offer, the wholesaler shall surrender the affected
25brand or brands to the brewer at the time payment is received
26from the brewer. If the wholesaler does not, in writing, accept

 

 

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1the brewer's written offer, either party may elect to submit
2the determination of reasonable compensation to expedited
3binding arbitration. If one party notifies the other party in
4writing that it elects expedited binding arbitration, the other
5party has 10 days from receipt of the notification to elect
6expedited binding arbitration or to reject the arbitration in
7writing. Failure to elect arbitration shall constitute
8rejection of the offer to arbitrate.
9        (A) If the parties agree to expedited binding
10    arbitration, the arbitration shall be subject to the
11    expedited process under the commercial rules of the
12    American Arbitration Association. The arbitration shall be
13    concluded within 90 days after the parties agree to
14    expedited binding arbitration under this Section, unless
15    extended by the arbitrator or one of the parties. The
16    wholesaler shall retain the affected brand or brands during
17    the period of arbitration, at the conclusion of which the
18    wholesaler shall surrender the affected brand or brands to
19    the brewer upon payment of the amount determined to be
20    reasonable compensation, provided the wholesaler shall
21    transfer the affected brand or brands to the brewer after
22    90 days if the arbitration proceedings are extended beyond
23    the 90 day limit at the request of the wholesaler.
24    Arbitration costs shall be paid one-half by the wholesaler
25    and one-half by the brewer. The award of the arbitrator
26    shall be final and binding on the parties.

 

 

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1        (B) If the brewer elects expedited binding arbitration
2    but the wholesaler rejects the offer to arbitrate:
3            (i) The wholesaler may accept, in writing, any
4        written offer previously made by the brewer. If the
5        wholesaler selects this option, the wholesaler must
6        surrender the affected brand or brands to the brewer at
7        the time payment is received. If the wholesaler
8        believes that the amount paid by the brewer is less
9        than reasonable compensation under subsection (1), the
10        wholesaler may bring a proceeding under subsection (2)
11        for the difference, but may not proceed under
12        subsection (3) of Section 9; or
13            (ii) The wholesaler may proceed against the brewer
14        under Section 9, provided the wholesaler must
15        surrender the affected brand or brands to the brewer if
16        a proceeding under Section 9 has not been initiated
17        within 90 days after the wholesaler rejects the offer
18        to arbitrate. Upon determination of reasonable
19        compensation pursuant to Section 9, the brewer shall
20        pay the wholesaler the amount so determined. Until
21        receiving payment from the brewer of the amount so
22        determined, the wholesaler shall retain the affected
23        brand or brands. If (a) the wholesaler retains the
24        affected brand or brands for a period of 2 years after
25        the wholesaler rejects the offer to arbitrate, (b) the
26        amount of reasonable compensation has not been

 

 

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1        determined, and (c) an injunction has not been issued,
2        the brewer shall, in good faith, make a payment of
3        reasonable compensation to the wholesaler. If,
4        however, the brewer fails to ship or make available
5        brands ordered by the wholesaler prior to the brewer
6        making any payment (including a good faith payment as
7        provided in this subsection) to the wholesaler, the
8        wholesaler shall be entitled to injunctive relief and
9        attorneys' fees and shall subject the brewer to
10        punitive damages. Upon receipt of this payment, the
11        wholesaler must surrender the affected brand or brands
12        to the brewer, provided that such surrender shall not
13        affect the brewer's obligation to pay all amounts
14        ultimately determined due to the wholesaler under this
15        Act.
16        (C) If the wholesaler elects expedited binding
17    arbitration but the brewer rejects, the brewer may proceed
18    under Section 9 for the purpose of determining reasonable
19    compensation. Upon determination of reasonable
20    compensation pursuant to Section 9, the brewer shall pay
21    the wholesaler the amount so determined. Until receiving
22    payment from the brewer of the amount so determined, the
23    wholesaler shall retain the affected brand or brands. If
24    (a) the brewer initiates a proceeding under Section 9
25    within 90 days after the wholesaler rejects the offer to
26    arbitrate, (b) the wholesaler retains the affected brand or

 

 

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1    brands for a period of 2 years from the date the wholesaler
2    rejects the offer to arbitrate, (c) the amount of
3    reasonable compensation has not been determined, and (d) an
4    injunction has not been issued, the brewer shall, in good
5    faith, make a payment of reasonable compensation to the
6    wholesaler. If, however, the brewer fails to ship or make
7    available brands ordered by the wholesaler prior to the
8    brewer making any payment (including a good faith payment
9    as provided in this subsection) to the wholesaler, the
10    wholesaler shall be entitled to injunctive relief and
11    attorneys' fees and shall subject the brewer to punitive
12    damages. Upon receipt of this payment, the wholesaler must
13    surrender the affected brand or brands to the brewer,
14    provided that such surrender shall not affect the brewer's
15    obligation to pay all amounts ultimately determined due to
16    the wholesaler under this Act.
17    (2) Except as otherwise provided in subsection (1.5), in
18the event that the brewer and the beer wholesaler are unable to
19mutually agree on the reasonable compensation to be paid for
20the value of the wholesaler's business, as defined in this Act,
21either party may maintain a civil suit as provided in Section 9
22or the matter may, by mutual agreement of the parties, be
23submitted to a neutral arbitrator to be selected by the parties
24and the claim settled in accordance with the rules provided by
25the American Arbitration Association. Arbitration costs shall
26be paid one-half by the wholesaler and one-half by the brewer.

 

 

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1The award of the arbitrator shall be final and binding on the
2parties.
3(Source: P.A. 96-482, eff. 8-14-09.)
 
4    Section 99. Effective date. This Act takes effect upon
5becoming law.".