Livingston on the Ongoing Issue of the Debtor's Name on UCC Article 9 Financing Statements

There are any number of potential pitfalls along the way to properly setting up a secured transaction, but perhaps the most bedeviling stems from the failure to set forth the debtor's name correctly on the financing statement. As a recent bankruptcy court decision reveals, even sophisticated creditors...

The Ongoing Issue of the Debtor's Name on UCC Article 9 Financing Statements

There are any number of potential pitfalls along the way to properly setting up a secured transaction, but perhaps the most bedeviling stems from the failure to set forth the debtor's name correctly on the financing statement. As a recent bankruptcy court decision reveals, even sophisticated creditors...

The Uniform Commercial Code and the Transfer of Mortgage Notes

The Permanent Editorial Board for the U.C.C. recently issued a report explaining the Code provisions relevant to the transfer and enforcement of mortgage notes. This report highlights the particular provisions of Articles 3 and 9 that pertain to who can enforce promissory notes in real property transactions...

Professor Margit Livingston on Mishaps Involving a Termination Statement, a Correction Statement, and a Last-Minute Financing Statement Under U.C.C. Article 9

Although Article 9 of the Uniform Commercial Code has attempted to make perfection an easily attainable goal for secured parties, mistakes still occur, and many of them prove fatal to the secured creditor's perfected status. The secured party in a recent bankruptcy case found itself in danger of...

A New Twist on Debtor Names on U.C.C. Article 9 Financing Statements

Public filing of a financing statement is the common method of achieving perfection of a security interest. Article 9 is unforgiving towards debtor name errors because the debtor's name is the gateway to the filing system. A recent federal district court case reveals that more than a decade after...

U.C.C. Article 9 Security Interests in FCC Licenses

Where the debtor is radio or television station, often the most valuable collateral will be the station's FCC broadcast license. But FCC licenses pose special problems for secured parties because of the federal restrictions on assignments and transfers of them. In a recent case, the Tenth Circuit...

Professor Margit Livingston on U.C.C. Article 9 Security Interests under the Federal Food Security Act

The normally impregnable status of the senior perfected security party is justified by the need to facilitate the extension of secured credit at reasonable interest rates. But in the case of buyers in the ordinary course of business, the policies work differently. Excerpt: Generally, senior...

Professor Margit Livingston on Priority Between Accounts Financers and Lien Creditors Under U.C.C. Article 9

If a secured party properly perfects its security interest by filing a financing statement in the appropriate public office, it can normally be assured that it will prevail over a lien creditor (including the trustee in bankruptcy) in a fight over the debtor's accounts. In a recent bankruptcy...

Professor Margit Livingston on Article 9 Financing Statements: The Debtor's Name and the Transition Rules Under the 2010 Amendments

The debtor name issue has been a troublesome one for decades. Legislative and judicial attempts to grapple with it have not been entirely successful. Once again, the drafters are hoping that this latest round of amendments will finally resolve this key question and make the public record system even...

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...

You’re What You Own: Perfection of Security Interests in Investment Property

by Jamie Watkins Bruno Under Article 9 of the Uniform Commercial Code ("UCC"), a secured party perfects its security interest in investment property - such as certificated and uncertificated securities, securities accounts and commodity accounts - by acquiring "control" over...

Changes of the Debtor's Location under the 2010 Amendments to U.C.C. Article 9

The 2010 Amendments to Article 9 (Secured Transactions) of the Uniform Commercial Code modify or clarify certain key provisions of the statute. One of the provisions so modified involves changes of the debtor's location. The 2010 Amendments do not change provisions regarding the debtor's...

Delaware Court Provides Critical Guidance as to the Commercial Reasonableness of a UCC Article 9 Foreclosure Sale

by Raphaela Taylor Secured lenders often resort to non-judicial foreclosure sales of personal property upon a borrower's default. Article 9, Part 6 of the Uniform Commercial Code requires that every aspect of such a sale must be commercially reasonable. However, the courts have historically...

Professor Margit Livingston on Changes in a Debtor's Business Structure under U.C.C. Article 9

A secured party that perfects its security interest without flaw at the outset can lose its perfected status because of post-filing changes in the debtor's business structure. It is incumbent upon secured parties to keep track of such changes and to act swiftly to preserve perfection at all times...

Livingston on Unauthorized Filing of Termination Statements under U.C.C. Article 9

In a recent bankruptcy case, the secured creditors, to their horror, found that they erroneously allowed the debtor to file a termination statement although the debtor still owed millions of dollars on the associated transaction. A sympathetic court, however, applying traditional common law principles...

Margit Livingston on Equitable Marshaling of U.C.C. Article 9 Security Interests

Plaintiff obtained a default judgment against Artemis Technologies and then sought to enforce that judgment serving writs of garnishment on their customers, who were the account debtors on the defendant's accounts receivable. For some reason the Bank with a prior perfected security interest had a...

Professor Margit Livingston on Attachment of U.C.C. Article 9 Security Interests

The first job for any secured party seeking to have an enforceable and perfectible security interest is to achieve attachment by: 1) having the secured party give value to the debtor; 2) the debtor having rights in the collateral and; usually, 3) the debtor's authentication of a security agreement...

Professor Margit Livingston on the Debtor's Name under the 2010 Amendments to U.C.C. Article 9: California's Interesting Journey

The 2010 Amendments to U.C.C. Article 9 went into effect in most states on July 1, 2013. A key portion of the amended debtor name provisions focused on the appropriate name of an individual debtor so as to ensure the best prospects of giving notice of the security interest. The drafters offered two alternate...

Professor Margit Livingston on Bankruptcy and Lapse of Perfection under U.C.C. Article 9

It is incumbent upon secured parties to file continuation statements within the six-month period before the expiration of their financing statements to ensure continued perfection. In a recent bankruptcy case, a secured creditor narrowly averted disaster when it let its financing statement lapse after...

Professor Margit Livingston on Article 9 Secured Parties vs. Lien Creditors Post-Default

Excerpt: Secured parties under U.C.C. Article 9 have a love-hate relationship with the cash proceeds of their collateral. On the one hand, a security interest in original collateral (inventory or accounts, for example) will remain attached and perfected in all identifiable cash proceeds of that collateral...

Enforceable Security Agreement Implied From Bill of Sale—UCC § 9-203

Tough Company, Inc. v. Wurlitzer 2014 Cal. App. Unpub. LEXIS 633 (Cal. App. 3d Jan. 28, 2014) (Not Officially Published) [ an enhanced version of this opinion is available to lexis.com subscribers ] In a legal battle between a “Tough Company” and a “Wurlitzer,” you might expect...

Professor Margit Livingston on Commercially Reasonable Dispositions of Collateral Under U.C.C. Article 9

The Code has two requirements for foreclosure sales: (1) The secured party must give reasonable notification of the impending sale and (2) the secured party must engage in a commercially reasonable disposition of the collateral. In a recent decision by the 5th Cir. Ct. of Appeals, the court focused on...

Professor Margit Livingston on Legal Malpractice for Failure to File a U.C.C. Article 9 Financing Statement

Every secured party's nightmare is the realization that it forgot to file a financing statement in the appropriate public office to perfect its security interest. Sometimes that nightmare extends to the secured party's attorney, who may find herself facing a legal malpractice claim for failing...

Professor Margit Livingston on Consignments under U.C.C. Article 9

Excerpt: Consignments are typical in the art world. The owner of a painting who wishes to sell it will often consign it to an art gallery for exhibit to the public. The gallery will be empowered to sell the painting on behalf of the owner, usually at a predetermined minimum price. Upon sale of the...

Professor Margit Livingston on The Debtor's Name on a U.C.C. Article 9 Financing Statement: In re Patriot Electric & Mechanical, Inc.

Much time, energy, and thought has been spent in refining UCC provisions regarding the correct debtor name for a financing statement and the amount of latitude that should be allowed for minor errors. Article 9 was revised in 2010 in part to address these troublesome issues. With the first cases under...