Indiana’s version of the Uniform Commercial Code includes a provision not contained in the Ohio, Illinois or Kentucky versions of revised Article 9. This provision in Indiana relates to the delivery of the initial financing statement to the debtor. No later than thirty days after the financing statement is filed, the creditor must furnish a copy of the financing statement to the debtor.
The difficulty with this requirement is that the creditor has the burden of proving that it complied with this requirement in the event that a question arises. There is no requirement that the financing statement delivered be a file-marked copy of the financing statement. To comply with this requirement, the creditor should include a document to be executed by the debtor at closing acknowledging receipt of a copy of the financing statement. The Indiana statute is silent on whether the debtor can waive its right to receive a copy of the financing statement and security agreement.
In the event that such a waiver is enforceable, financial institutions should consider including such a waiver provision in its security agreements used in Indiana so that a financial institution can attempt to assert the waiver as a defense in the event that the signed acknowledgement is lost or inadvertently not obtained. However, financial institutions should not rely on any waiver language, and should continue to obtain signed acknowledgements from the debtors.
Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com
Tags: financing statement, Laura A. Scott, Uniform Commercial Code