Foster Swift Business & Corporate Law Update
Because of current depressed economic conditions, many licensees who have held liquor licenses in escrow since 2004 have been unable to sell or reactivate their licenses. The current Rule (R436.1107) provides that a license held in escrow since 2004, i.e. for the 5-year escrow period, would have expired on April 30, 2009 (the end of the licensing period). The Michigan Liquor Control Commission (MLCC) has issued a “Request for Rulemaking” and is considering proposed rules that would permit the MLCC to extend the escrow period. A copy of the proposed rules is available here:
The proposed new rule would amend R436.1107 to grant authority to MLCC to extend the period that a liquor license may be held in escrow (inactive status) beyond the 5-year period currently allowed. Although the new rule has not yet been adopted, if you are a licensee currently holding an MLCC license in escrow and it either expired on April 30, 2009, or will expire on April 30, 2010, you may be able to obtain an extension of your escrow period under the new rule (if adopted). To request an extension, a licensee must (1) submit a request to MLCC for an extension of time to sell or activate a license; and (2) be able to demonstrate good cause for the extension.
There is no guarantee that all requests will be granted; however, the proposed amendment will at the very least allow MLCC to review the request for extension before a license has been deemed expired or terminated.