Legal Question in Business Law in California

Who is out of business, the dealer? I'd say first, that there probably isn't a statute on the subject; this is something that would ordinarily depend upon the contract between the distributor and the dealer, taking the term "contract" in the broadest sense, to include any purchase order, terms of sale, dealer-distributor term sheets or contractual arrangements, and the like. If all of the above are silent on the matter, there's probably something in the Uniform Commercial Code, adopted in California with little change from versions adopted in Illinois and elsewhere, that would govern, but without full particulars I couldn't begin to look.

There is no law, only the terms of your contracts. Read them.