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What You Need to Know for UCC Searching and Filing
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Your Presenter
Lacey BowerFinancial Account Manager
Corporation Service Company
• Speaker on UCC searching and filing best practices
• Works with banks of all sizes, lenders, lessors, and manufacturing companies
© Corporation Service Company. All Rights Reserved.
• Founded: 1899• Headquartered: Wilmington, DE• Years serving financial industry: >60• UCC transactions processed annually:
>6m• UCC transactions monitored: >8m
History & Values
Vital stats: Largest U.S.-owned provider of lien related services, registered agent, entity & litigation management, and digital brand services
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• Questions to Ask• Searching• Filing• Monitoring• CSC Tools• Demonstration• Graduation
Recipe For sUCCess
Questions to Ask
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• Are you following searching and filing best practices?
• Are you filing against the right debtor names every time?
• Are you monitoring your portfoliofor changes that may affect yourlien position?
Questions to Ask
Searching
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Review of Searching Best Practices
Individuals
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Review of Searching Best Practices
IndividualsThe starting point for every UCC search conducted on an individual is the driver’s license.
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Review of Searching Best Practices
Registered Organizations
IndividualsThe starting point for every UCC search conducted on an individual is the driver’s license.
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Review of Searching Best Practices
Registered Organizations
Individuals
Use the Public Organic Record.
The starting point for every UCC search conducted on an individual is the driver’s license.
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Review of Searching Best Practices
Registered Organizations
Individuals
Collateral administeredby decedent’s
personal representative
Use the Public Organic Record.
The starting point for every UCC search conducted on an individual is the driver’s license.
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Review of Searching Best Practices
Registered Organizations
Individuals
Collateral administeredby decedent’s
personal representative
Use the Public Organic Record.
The starting point for every UCC search conducted on an individual is the driver’s license.
Search the name of the decedent.
© Corporation Service Company. All Rights Reserved.
Review of Searching Best Practices
Registered Organizations
Individuals
Collateral administeredby decedent’s
personal representative
Use the Public Organic Record.
The starting point for every UCC search conducted on an individual is the driver’s license.
Search the name of the decedent.
Collateral held in a trustthat is not a registered
organization
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Review of Searching Best Practices
Registered Organizations
Individuals
Collateral administeredby decedent’s
personal representative
Use the Public Organic Record.
The starting point for every UCC search conducted on an individual is the driver’s license.
Search the name of the decedent.
Collateral held in a trustthat is not a registered
organization
Search on the name put forth in the trust documents. If there is no name, search on the settlor.
© Corporation Service Company. All Rights Reserved.
Review of Searching Best Practices
Registered Organizations
Individuals
Collateral administeredby decedent’s
personal representative
Use the Public Organic Record.
The starting point for every UCC search conducted on an individual is the driver’s license.
Search the name of the decedent.
Collateral held in a trustthat is not a registered
organization
Search on the name put forth in the trust documents. If there is no name, search on the settlor.
ALWAYS include name variations for due diligence purposes.
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State Search Logic: What You Must Know
• The state’s search logic in minute detail
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State Search Logic: What You Must Know
• The state’s search logic in minute detail
• How the search will perform underALL circumstances
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State Search Logic: What You Must Know
• The state’s search logic in minute detail
• How the search will perform underALL circumstances
• The state’s historical indexing practices
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Example of State Logic
Name Searched Record above found?THE MCKERN Not Found
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Example of State Logic
Name Searched Record above found?THE MCKERN Not FoundMCKERN Not Found
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Example of State Logic
Name Searched Record above found?THE MCKERN Not FoundMCKERN Not FoundTHE MCKERNON GROUP Not Found
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Example of State Logic
Name Searched Record above found?THE MCKERN Not FoundMCKERN Not FoundTHE MCKERNON GROUP Not FoundTHE MCKERNON GROUP, INC. Not Found
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Example of State Logic
Name Searched Record above found?THE MCKERN Not FoundMCKERN Not FoundTHE MCKERNON GROUP Not FoundTHE MCKERNON GROUP, INC. Not FoundMCKERNON GROUP, INC. Found
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Example of State Logic
Name Searched Record above found?THE MCKERN Not FoundMCKERN Not FoundTHE MCKERNON GROUP Not FoundTHE MCKERNON GROUP, INC. Not FoundMCKERNON GROUP, INC. FoundMCKERNON Found
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Example of State Logic
Name Searched Record above found?THE MCKERN Not FoundMCKERN Not FoundTHE MCKERNON GROUP Not FoundTHE MCKERNON GROUP, INC. Not FoundMCKERNON GROUP, INC. FoundMCKERNON FoundMCKERNON GROUP, INC. THE Found
Filing
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Choose the correct debtor name
Filing: Get the Debtor Name Right
• Understand theimpact of the2010 Amendments
• Follow best practices forfiling against individualsand registered organizations
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Only if
• Debtor name must be exactly what appears on the individual’s driver’s license
• Sometimes called “Alternative A”
• Very strict for filer
• If license is expired or not issued by filing state, default to safe harbor
Individual Debtor Names
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Safe harbor
• Name can be what appears on drivers license, but other names may work as well
• Sometimes called “Alternative B”
• More forgiving for filer
Individual Debtor Names
Only if
• Debtor name must be exactly what appears on the individual’s driver’s license
• Sometimes called “Alternative A”
• Very strict for filer
• If license is expired or not issued by filing state, default to safe harbor
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RIMA
CTNJDEMDDC
AK
HI
AZ NM
ND
FL
LA
WVCA
OR
WAMT
ID
NVUT
WY
CO
SD
NE
KS
OK
TX
MN
IA
MO
AR
WI
IL
MI
IN OH
KYTN
MS AL GASC
NC
VA
PA
NY
MENHVT
Enactments and Legislative Status of the2010 Amendments to UCC Article 9
Enacted with Alternative AEnacted with Alternative BLegislation Failed or Not Introduced
PR
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Resources on Individual Debtor Name Requirements
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Corporate Debtor Name Best Practices
Corps/LLCs
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Corporate Debtor Name Best Practices
Corps/LLCs Public organic record
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Corporate Debtor Name Best Practices
Corps/LLCs
Government charter entity(Farm Credit Bank)
Public organic record
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Corporate Debtor Name Best Practices
Corps/LLCs
Government charter entity(Farm Credit Bank)
Public organic record
Charter document
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Corporate Debtor Name Best Practices
Corps/LLCs
Government charter entity(Farm Credit Bank)
Business trusts(Massachusetts)
Public organic record
Charter document
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Corporate Debtor Name Best Practices
Corps/LLCs
Government charter entity(Farm Credit Bank)
Business trusts(Massachusetts)
Public organic record
Charter document
Record filed with the stateunder state law
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Corporate Debtor Name Best Practices
Corps/LLCs
Government charter entity(Farm Credit Bank)
Business trusts(Massachusetts)
Entity created bylegislation (ex: Fannie Mae)
Public organic record
Charter document
Record filed with the state under state law
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Corporate Debtor Name Best Practices
Corps/LLCs
Government charter entity(Farm Credit Bank)
Business trusts(Massachusetts)
Entity created bylegislation (ex: Fannie Mae)
Public organic record
Charter document
Record filed with the state under state law
Statute that created the entity
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Formation Documents:Network Solutions, Inc.
Debtor name filed on UCC: Net work Solutions, Inc.
In re Receivables Purchasing Covs. R & R Directional Drilling LLC
Crossing Your t’s & Dotting Your i’s
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Formation Documents:Network Solutions, Inc.
Debtor name filed on UCC: Net work Solutions, Inc.
In re Receivables Purchasing Covs. R & R Directional Drilling LLC
Crossing Your t’s & Dotting Your i’s
LOST A CLAIM FOR
$80,000
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Formation Documents: K. W. M. Electronics Corporation
Debtor name filed on UCC: KWM Electronics Corporation
In re Host America Corporation v Coastline Financial Inc.
Crossing Your t’s & Dotting Your i’s
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Formation Documents: K. W. M. Electronics Corporation
Debtor name filed on UCC: KWM Electronics Corporation
In re Host America Corporation v Coastline Financial Inc.
Crossing Your t’s & Dotting Your i’s
LOST A CLAIM FOR
$295,000
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Formation Documents:Tyringham Holdings, Inc.
Debtor name filed on UCC: Tyringham Holdings
In re Tyringham Holdings, Inc.
Crossing Your t’s & Dotting Your i’s
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Formation Documents:Tyringham Holdings, Inc.
Debtor name filed on UCC: Tyringham Holdings
In re Tyringham Holdings, Inc.
Crossing Your t’s & Dotting Your i’s
LOST A CLAIM FOR
$310,000
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UCC Filings: Where to File
General Rule• File in central filing
office where debtor is located• Exceptions: GA, LA
Collateral Exceptions• Fixtures• Timber to be cut• Minerals to be extracted
Filing Location for Collateral ExceptionsOffice where a mortgage would be recorded on the affected real property
GALA
File at parish level
File at county level
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UCC Filings: Location of Debtor
IndividualLocation of principal residence
Jurisdictions Without Filing RequirementDistrict of Columbia
Other Non-Registered OrganizationAt place of business—chief executive office if more than one
Registered Organization Under Federal LawWhere designated by law or D.C.
Registered Organization Under State LawWhere organized or incorporated
Monitoring
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• Changes in your debtor’s name or status can affect your lien position.
• It’s crucial to monitor your portfolio for changes and to prevent lapsed filings.
• There are simple, automated ways to receive alerts when things change.
Portfolio Monitoring
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• Email notifications of approaching dates
• Copies of acknowledgements
• Filing numbers auto-populated into UCC-3
• Flexible reporting
• The notification frequency of your choice
Expiration Tracking
The most common post-perfection event that requires prompt secured party action is a change in the debtor’s name.
Case Study
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In Re: Lifestyle Home Furnishings, LLC
Failure to File Debtor Name Amendment Leaves Lender Partially Unperfected 2010 Bankr. LEXIS 111
(D. Idaho, Jan. 14, 2010)
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In Re: Lifestyle Home Furnishings, LLC
Ownership of Factory Direct,LLC changed
Failure to File Debtor Name Amendment Leaves Lender Partially Unperfected 2010 Bankr. LEXIS 111
(D. Idaho, Jan. 14, 2010)
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In Re: Lifestyle Home Furnishings, LLC
Ownership of Factory Direct,LLC changed
New owners changed name from
“Factory Direct, LLC” to “Lifestyle Home Furnishings,
LLC”
Failure to File Debtor Name Amendment Leaves Lender Partially Unperfected 2010 Bankr. LEXIS 111
(D. Idaho, Jan. 14, 2010)
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In Re: Lifestyle Home Furnishings, LLC
Ownership of Factory Direct,LLC changed
New owners changed name from
“Factory Direct, LLC” to “Lifestyle Home Furnishings,
LLC”
Debtor did not notify the bank
of its name change
Failure to File Debtor Name Amendment Leaves Lender Partially Unperfected 2010 Bankr. LEXIS 111
(D. Idaho, Jan. 14, 2010)
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In Re: Lifestyle Home Furnishings, LLC
Ownership of Factory Direct,LLC changed
New owners changed name from
“Factory Direct, LLC” to “Lifestyle Home Furnishings,
LLC”
Debtor did not notify the bank
of its name change
Consequently, the bank did not file an amendment or a new financing
statement
Failure to File Debtor Name Amendment Leaves Lender Partially Unperfected 2010 Bankr. LEXIS 111
(D. Idaho, Jan. 14, 2010)
© Corporation Service Company. All Rights Reserved.
In Re: Lifestyle Home Furnishings, LLC
Ownership of Factory Direct,LLC changed
New owners changed name from
“Factory Direct, LLC” to “Lifestyle Home Furnishings,
LLC”
Debtor did not notify the bank
of its name change
Consequently, the bank did not file an amendment or a new financing
statement
On April 7, 2008, the Debtor filed for Chapter 7
bankruptcy
Failure to File Debtor Name Amendment Leaves Lender Partially Unperfected 2010 Bankr. LEXIS 111
(D. Idaho, Jan. 14, 2010)
© Corporation Service Company. All Rights Reserved.
In Re: Lifestyle Home Furnishings, LLC
Ownership of Factory Direct,LLC changed
New owners changed name from
“Factory Direct, LLC” to “Lifestyle Home Furnishings,
LLC”
Debtor did not notify the bank
of its name change
Consequently, the bank did not file an amendment or a new financing
statement
On April 7, 2008, the Debtor filed for Chapter 7
bankruptcy
Trustee filed an adversary proceeding to avoid the bank’s security interest and moved for a partial summary judgment on
the grounds that the bank became unperfected four months after the Debtor changed its name
Failure to File Debtor Name Amendment Leaves Lender Partially Unperfected 2010 Bankr. LEXIS 111
(D. Idaho, Jan. 14, 2010)
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Notifies you when a corporate debtor ...
• Changes their corporate name
• Falls out of good standing
• Dissolves or merges
Corporate Tracking
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• Alerts you to new filings against your debtor, including new lending and terminations (even yours!)
• Sends email alerts with link to thetracking results
• Allows you to evaluate findings and request copies if needed
Debtor Tracking
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Any delay in responding to bankruptcy filings can be costly
Monitors court records and compares them to your
• Debtor Name• Street Address• City• State• Zip Code
Bankruptcy Tracking
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CSC Tools
• Secured Party Representation
• CSCTransactionWatch
• Expert’s Corner
• B2B UCC Integration withLoan Origination System
Arm Yourself
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• UCC financing statements are public record
• Anyone can access your customer list
• Using a secured party representative prevents competitors from identifying filings
• SPRS centralizes inquiries
Secured Party Representation
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CSC provides you with an archive of filing office closings and communications, pending and new legislation, UCC Article 9 updates.
Stay Informed of Industry Developments
CSCFinancial OnlineDemo
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Lacey BowerFinancial Account Manager
Corporation Service Company
800-927-9801 [email protected]
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