2010 Amendments to Article 9: Debtor's Name on Financing Statements


The Uniform Commercial Code itself, scholarly articles, and judicial decisions have long emphasized the importance of the debtor's name on an Article 9 financing statement. The debtor's name is one of only three pieces of information absolutely required on a filed financing statement, and it is undoubtedly the most critical piece of information. See U.C.C. § 9-502 (a) (Official Version 2009) (also requiring the secured party's or its representative's name and an indication of the collateral). The debtor's name is the gateway to the public filing system: searchers seeking information about possible prior security interests will access the filing system by entering a search request under the debtor's name.

Notwithstanding the critical importance of the debtor's name, the 2001 revision to U.C.C. Article 9 left this element somewhat ambiguous, particularly where individual debtors are involved. Thus, the current version of Article 9 simply requires that for individual debtors, the filing secured party should use that individual's "name." U.C.C. § 9-503 (a)(4)(A). As a result, courts have struggled to determine whether secured parties complied with the statute when they filed financing statements listing the debtor under a nickname, using a variant spelling of the debtor's name, or setting forth a non-Anglo name in accordance with typical English conventions. See Clark v. Deere & Co. (In re Kinderknecht), 308 B.R. 71(B.A.P. 10th Cir. 2004); Nazar v. Bucklin Nat'l Bank (In re Erwin), Nos. 02-10227, 02-5176, 2003 Bankr. LEXIS 692 (Bankr. D. Kan. June 27, 2003); Corona Fruits & Veggies, Inc. v. Frozsun Foods, Inc., 143 Cal. App. 4th 319, 48 Cal. Rptr. 3d 868 (2006); All Business Corp. v. Choi, 634 S.E.2d 400 (Ga. Ct. App. 2006); Pankratz Implement Co. v. Citizens Nat'l Bank, 130 P.3d 57 (Kan. 2006).

In 2010, the U.C.C. drafters promulgated proposed amendments to Article 9 designed to address some of the worrisome issues created by the 2001 version of the statute. Although these amendments have not yet received full approval, it is likely that they will be passed in final form in Fall 2010. One of the major proposed revisions focuses on the appropriate name of a debtor to be used on a filing financing statement. Although the draft provisions amend debtor name requirements for registered organizations, estates, and trusts, this comment will concentrate on the amendments relating to individual debtor names.

As mentioned previously, Article 9 in its current form states that a financing statement "sufficiently provides that name of the debtor . . . if the debtor has a name, only if it provides the individual or organizational name of the debtor." U.C.C. § 9-503 (a)(4)(A). The 2010 amendments offer two alternative provisions applying to individual debtor names. Under Alternative A, the secured party is directed to use the name of an individual debtor as indicated on his/her unexpired driver's license issued by "this State." U.C.C. § 9-503 (a)(4) (Draft Alt. A 2010). If the debtor does not have an unexpired driver's license issued by "this State," then the secured party should provide the "individual name of the debtor or the surname and first personal name of the debtor." U.C.C. § 9-503 (a)(5) (Draft Alt. A 2010).

Access the full version of "2010 Amendments to Article 9: Debtor's Name on Financing Statements" with your ID

If you do not have a ID, you can purchase the Emerging Issues Analysis content through our Research Value Packages