Welcome to the new Lien Solutions blog – insights and resources to help professionals reduce risk and shape the future of their business. You’ll find articles on thought leadership, practical tips, and an exchange of ideas that drive innovation and better outcomes.
With an opinion that contains the classic line, “A secured party is the master of its own termination statement,” the Delaware Supreme Court held on Oct. 17, 2014, that a UCC-3 termination statement, which was filed by mistake and resulted in the termination of a $1.5 billion term loan, was effective because the filing was authorized by the secured parties involved.
Articles of incorporation, also known as a corporate charter, establish the existence of a corporation in the United States and Canada, and are always filed with the secretary of state or other company register. They may also be referred to as the public organic record.
Conducting a UCC search, due diligence and risk mitigation can sometimes be a confusing process, especially for companies and people new to experience. One question that often comes up from new filers (and occasionally from more seasoned ones, as well) is whether they can file on an individual debtor using his or her driver’s license.
Article 9 of the UCC requires the lender (secured party) to perfect its security interest in most types of collateral by preparing a UCC-1 financing statement and filing it with the appropriate government agency (most often the Secretary of State or County Recorder). As the lender who has taken the risk and extended the loan, it’s critical to pay close attention to every detail when preparing the UCC financing statement. Even the seemingly smallest of typographical errors could render the filing ineffective and your priority position no more.
If you ever find yourself in that frustrating situation the answer is: Yes, you can, providing this is no existing obligation to the lender. This is provided for in Section 9-513 of the Uniform Commercial Code.
Today it’s more important than ever to make certain you have the proper debtor name on all of your UCC filings. Unfortunately, as with every complex, multi-stage human endeavor, errors happen. With a UCC debtor name error, however, that mistake may not be apparent until the debtor encounters financial difficulty and the entity issuing the loan needs to collect its collateral months, or even years later.
In many transactions, proper due diligence includes searching the public record for UCC liens, as well as many other types of liens that may be on file in the various filing offices throughout the country. Unfortunately, with more than 4,300 possible filing offices, conducting a thorough and comprehensive search can be a daunting task! Here we provide a basic overview for formulating a search strategy.
Have you ever wondered what a “fixture filing” is? Learn more and see if filing a fixture filing is your right course of action.
UCC Back-to-Basics Series UCC-3s are used in a variety of transactions, and they are a key part of life cycle of a loan. Learn more about the how UCC-3s help you to secure your assets. A UCC-3 is defined as a filing used to make any changes to a UCC-1 filing, including continuing or terminating […]
Mitigating risk is a key component of lending, and it requires you to learn as much as possible about a potential borrower. Whether they’re an individual or business, you need to know the value of their assets, cash flow, credit score, and — most importantly — existing liabilities. Discovering this requires an aggressive approach to […]