The Bamberger Blog » financing statement http://www.bamberger.com/blog Tue, 07 Feb 2012 13:30:16 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 UCC Filing System Leaves No Room for Error http://www.bamberger.com/blog/2011/05/ucc-filing-system-leaves-no-room-for-error/ http://www.bamberger.com/blog/2011/05/ucc-filing-system-leaves-no-room-for-error/#comments Tue, 24 May 2011 13:30:48 +0000 kjewell http://www.bamberger.com/blog/?p=883 Whether or not a filed financing statement is effective depends on whether or not the filer was authorized to make the filing. It does not matter that a filer made a mistake in a filing or did not intend to file a particular statement.  For example, if an authorized secured party intended to file an amendment to a financing statement but instead checked the wrong box on the form and filed a termination statement by mistake, the termination is still effective. 

If the party had the authority to file a termination, the record is terminated despite the fact that the filing was made in error.  There is no ability to “take back” the incorrect filing or to “reinstate” the original filing through filing a correction statement or a continuation statement.  The only option available for a secured party is to file a new UCC financing statement that will become effective from the date of filing and will not relate back to the date of the original filing. 

If you have questions about UCC filing issues, please contact a Bamberger attorney.

Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com

]]> http://www.bamberger.com/blog/2011/05/ucc-filing-system-leaves-no-room-for-error/feed/ 0 Kentucky Case Finds Liability for Wrongful Termination of Financing Statement http://www.bamberger.com/blog/2011/04/kentucky-case-finds-liability-for-wrongful-termination-of-financing-statement/ http://www.bamberger.com/blog/2011/04/kentucky-case-finds-liability-for-wrongful-termination-of-financing-statement/#comments Tue, 26 Apr 2011 13:03:11 +0000 kjewell http://www.bamberger.com/blog/?p=864 In a case recently decided in Kentucky, Secured Party A filed a termination statement relating to a financing statement originally filed by Secured Party B.  The Court held that Secured Party A was not authorized to file the termination statement on behalf of Secured Party B.  As a result of the wrongful termination, Secured Party A was liable to Secured Party B for damages incurred by the wrongful termination. 

The Court seemed to hold that the wrongfully filed termination statement was effective to terminate the financing statement, even though it was an authorized filing.  This is an incorrect interpretation of Article 9 of the Uniform Commercial Code.  If a secured party is not authorized to file a termination statement, then the termination statement does not effectively terminate the security interest. If you have questions about financing statements, please contact a Bamberger attorney.

Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com

]]> http://www.bamberger.com/blog/2011/04/kentucky-case-finds-liability-for-wrongful-termination-of-financing-statement/feed/ 0 Change is Coming to the Way Lenders Perfect Security Interests! http://www.bamberger.com/blog/2010/12/change-is-coming-to-the-way-lenders-perfect-security-interests/ http://www.bamberger.com/blog/2010/12/change-is-coming-to-the-way-lenders-perfect-security-interests/#comments Tue, 07 Dec 2010 13:30:08 +0000 kjewell http://www.bamberger.com/blog/?p=719 The nationwide group of experts responsible for writing and updating the Uniform Commercial Code has just finished revising UCC Article 9 which relates to security interests between lenders and borrowers. 

While no state has yet adopted the amendments to UCC Article 9, it is reasonable to expect that some, if not all, of these changes will be approved and implemented by the various states reasonably soon.  The most important changes in UCC Article 9 involves how to state the debtor’s name in a financing statement.  Also, a new form of UCC financing statement is on the horizon.  Stay tuned for future blog posts for more information on these anticipated changes to UCC Article 9.

Author: Laura A. Scott (bio)
Phone: 812.452.3557
email: lscott@bamberger.com

]]> http://www.bamberger.com/blog/2010/12/change-is-coming-to-the-way-lenders-perfect-security-interests/feed/ 0 Documenting Delivery of the Initial Financing Statement to the Debtor in Indiana http://www.bamberger.com/blog/2010/07/documenting-delivery-of-the-initial-financing-statement-to-the-debtor-in-indiana/ http://www.bamberger.com/blog/2010/07/documenting-delivery-of-the-initial-financing-statement-to-the-debtor-in-indiana/#comments Tue, 27 Jul 2010 13:30:31 +0000 kjewell http://www.bamberger.com/blog/?p=592 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

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