Important UCC Alert!

2010 Amendments to the Uniform Commercial Code go into effect Monday, July 1, 2013.

 

We are sending this as a follow-up to our The Advisor article sent on April 16, 2013, “What to Know about Filing UCC Financing Statements under the 2010 Amendments.” The full article can be found here.  We received several questions from lenders regarding whether it will be necessary to re-file Financing Statements to comply with the 2010 Amendments. Regarding this, we have the following comments.

As long as a Financing Statement was filed in compliance with all statutory requirements in place at the time of filing, the Financing Statement will not be rendered ineffective by virtue of the 2010 Amendments. Thus, Lenders need not re-file prior Financing Statements for the sole purpose of correctly naming the debtor pursuant the 2010 Amendments. However, in entering new loans, lenders should be aware that the same is true for other secured creditors. That means, another creditor could have filed a Financing Statement listing the debtor in a manner that complied with the UCC prior to the 2010 Amendments, but would not comply with the 2010 Amendments. In such cases, the other creditor’s Financing Statement may not be revealed in a search of the debtor under the debtor’s correct name. As such, a lender should always determine the correct name of a debtor, for purposes of filing its own Financing Statement, and also search the debtor using previous names, in order to reveal any other Financing Statements filed prior to the 2010 Amendments.

The full and final version of the UCC, incorporating the 2010 Amendments (Minn. Stat. Sections 336.9-101 through 809), can be found here.

 

The post Important UCC Alert! appeared first on Anastasi | Jellum.