Sen. Antonio Muņoz

Filed: 3/15/2012

 

 


 

 


 
09700SB3399sam001LRB097 18875 KTG 67484 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 gross receipts volume of the
10wholesaler's business for all beer products supplied by the
11wholesaler to the retailer all brewers. For purposes of this
12subsection (1.5) only, "annual volume" means the volume of beer
13products sold by the wholesaler in the 12-month period
14immediately preceding receipt of the brewer's written offer
15pursuant to this subsection (1.5) and "annual gross receipts"
16means the revenues received by the wholesaler from beer
17products sold by the wholesaler in the 12-month period
18immediately preceding receipt of the brewer's written offer
19pursuant to this subsection (1.5).
20    If a brewer is required to pay reasonable compensation as
21described in subsection (1) and the question of reasonable
22compensation is the only issue between the parties, the brewer
23shall, in good faith, make a written offer to pay reasonable
24compensation. The wholesaler shall have 30 days from receipt of
25the written offer to accept or reject the brewer's offer.
26Failure to respond, in writing, to the written offer shall

 

 

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1constitute rejection of the offer to pay reasonable
2compensation. If the wholesaler, in writing, accepts the
3written offer, the wholesaler shall surrender the affected
4brand or brands to the brewer at the time payment is received
5from the brewer. If the wholesaler does not, in writing, accept
6the brewer's written offer, either party may elect to submit
7the determination of reasonable compensation to expedited
8binding arbitration. If one party notifies the other party in
9writing that it elects expedited binding arbitration, the other
10party has 10 days from receipt of the notification to elect
11expedited binding arbitration or to reject the arbitration in
12writing. Failure to elect arbitration shall constitute
13rejection of the offer to arbitrate.
14        (A) If the parties agree to expedited binding
15    arbitration, the arbitration shall be subject to the
16    expedited process under the commercial rules of the
17    American Arbitration Association. The arbitration shall be
18    concluded within 90 days after the parties agree to
19    expedited binding arbitration under this Section, unless
20    extended by the arbitrator or one of the parties. The
21    wholesaler shall retain the affected brand or brands during
22    the period of arbitration, at the conclusion of which the
23    wholesaler shall surrender the affected brand or brands to
24    the brewer upon payment of the amount determined to be
25    reasonable compensation, provided the wholesaler shall
26    transfer the affected brand or brands to the brewer after

 

 

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

 

 

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

 

 

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1    payment from the brewer of the amount so determined, the
2    wholesaler shall retain the affected brand or brands. If
3    (a) the brewer initiates a proceeding under Section 9
4    within 90 days after the wholesaler rejects the offer to
5    arbitrate, (b) the wholesaler retains the affected brand or
6    brands for a period of 2 years from the date the wholesaler
7    rejects the offer to arbitrate, (c) the amount of
8    reasonable compensation has not been determined, and (d) an
9    injunction has not been issued, the brewer shall, in good
10    faith, make a payment of reasonable compensation to the
11    wholesaler. If, however, the brewer fails to ship or make
12    available brands ordered by the wholesaler prior to the
13    brewer making any payment (including a good faith payment
14    as provided in this subsection) to the wholesaler, the
15    wholesaler shall be entitled to injunctive relief and
16    attorneys' fees and shall subject the brewer to punitive
17    damages. Upon receipt of this payment, the wholesaler must
18    surrender the affected brand or brands to the brewer,
19    provided that such surrender shall not affect the brewer's
20    obligation to pay all amounts ultimately determined due to
21    the wholesaler under this Act.
22    (2) Except as otherwise provided in subsection (1.5), in
23the event that the brewer and the beer wholesaler are unable to
24mutually agree on the reasonable compensation to be paid for
25the value of the wholesaler's business, as defined in this Act,
26either party may maintain a civil suit as provided in Section 9

 

 

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1or the matter may, by mutual agreement of the parties, be
2submitted to a neutral arbitrator to be selected by the parties
3and the claim settled in accordance with the rules provided by
4the American Arbitration Association. Arbitration costs shall
5be paid one-half by the wholesaler and one-half by the brewer.
6The award of the arbitrator shall be final and binding on the
7parties.
8(Source: P.A. 96-482, eff. 8-14-09.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.".