02/21/2013 11:36:08 AM EST
Article 9 Financing Statements: Debtor Name Changes under the 2010 Amendments
The 2010 Amendments to UCC Art.
9, effective July 1, 2013, do not make sweeping changes to the overall
structure and rules of existing Article 9, but in a few key areas, the drafters
have significantly altered the current statutory provisions to simplify and
clarify the law. One of those areas involves the debtor's name on filed
Most states have now adopted
the 2010 Amendments to U.C.C. Article 9, with an effective date of July 1,
2013, and legislation is pending in all but a handful of the remaining states. See
National Conference Commissioners on Uniform State Laws, Legislative
Fact Sheet-UCC Article 9 Amendments (2010). The 2010 Amendments do not make
sweeping changes to the overall structure and rules of existing Article 9, but
in a few key areas, the drafters have significantly altered the current
statutory provisions to simplify and clarify the law. One of those areas
involves the debtor's name on filed financing statements. The changes to the
debtor name rules also affect indirectly the provisions involving post-filing
changes to the debtor's name.
Article 9 insists that security parties perfect their security interests to
gain priority over most other claimants to the debtor's property. In addition,
perfection is necessary for survival of security interests in the event of the
debtor's filing for bankruptcy; the trustee in bankruptcy may avoid unperfected
security interests under federal law. See U.C.C. §§ 9-317 (Official Text
2009) (giving perfected security interests priority over lien creditors and
certain buyers); 9-322 (a) (according perfected senior secured parties priority
over later secured parties). See also 11 U.S.C. § 544 (a) (2011)
(allowing the trustee in bankruptcy to set aside unperfected security
interests). To perfect their security interests, creditors commonly file
financing statements in the appropriate public office. U.C.C. § 9-310 (a)
(2009). The debtor's name is one of the three essential pieces of information
on a financing statement and perhaps the most important one as later creditors
typically search the public records by means of the debtor's name. U.C.C. §
9-502 (a) (2009).
Current Article 9 sets forth what constitutes the debtor's "name" for
purposes of filing, and the 2010 Amendments attempt to clarify the existing
definitions. Under the 2001 version of the statute, the name of a registered
organization, such as a corporation or limited liability company, is "the
name of the debtor indicated on the public record of the debtor's jurisdiction
of organization which shows the debtor to have organized." U.C.C. § 9-503
(a)(1) (2009). The 2010 Amendments modify that definition by stating that a
registered organization's name is "the name that is stated to be the
registered organization's name on the public organic record most recently filed
with or issued or enacted by the registered organization's jurisdiction of
organization which purports to state, amend, or restate the registered
organization's name." U.C.C. § 9-503 (a)(1) (2010 Amendments). This
amendment clarifies that a corporation's name, for example, is the name stated
on the corporation's formation documents that are publicly available in a state
or federation registration system-in other words, the name on the corporation's
public "birth certificate." See U.C.C. § 9-102 (a)(68) (2010
Amendments) (defining "public organic record").
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