Risk Management Blog

UCC & Corporate Due Diligence

Resource Guide for Legal and Financial Professionals

Maximize UCC and Lien Search Results to Minimize Risk

UCC, Due Diligence

When conducting UCC and lien searches as part of a prefunding due diligence investigation it is a good idea to maximize your results in order to minimize your risk. This strategy helps uncover hidden liens and those filed under critical name variations. To accomplish this, you will want to cast a wide net to bring in as many potential hits as possible and then whittle them down to only those that are pertinent to your transaction. Online… >> READ MORE


Secured Creditors and Unsecured Creditors: What’s the Difference?

UCC, Due Diligence

There are secured creditors and unsecured creditors. But what is the difference between secured creditors and unsecured creditors? Secured Creditors Secured Creditors are creditors that hold a lien on its debtor’s property, whether that property is real property or personal property. The lien gives the secured creditor an interest in its debtor’s property that provides for the property to be sold to satisfy the debt in cases of default.… >> READ MORE


To Find Legal Name of a Business Debtor, Refer to Organizing Paperwork

UCC, Corporate

According to the Uniform Commercial Code, a UCC Financing Statement is only effective if it gets the debtor name right. A UCC Financing Statement that fails to properly identify the debtor by their legal name will not offer the secured party priority status to collect should the debtor default or file for bankruptcy. The Code goes on to say that for registered business debtors, the name that should appear on a UCC Financing Statement… >> READ MORE


Omit “dba” notation from UCC Filings

UCC

A UCC Financing Statement must properly identify the debtor in order for the UCC to perfect a security interest and provide priority protection for the secured party. To satisfy this requirement, a secured party must complete their Financing Statement using the debtor’s legal name. In general, secured parties understand the importance of properly naming the debtor on their UCC Financing Statements and try hard to comply. Sometimes though,… >> READ MORE


Understanding and Obtaining Good Standing Certificates

Corporate

We here at First Corporate Solutions get a lot of inquiries about and requests for good standing certificates. Those of us in the public records industry interact with these documents all the time. Sometimes though, regular folks with no experience in corporate documents are told they need a good standing certificate and they feel lost and confused about what to do. As the title suggests, this week’s blog post aims to provide readers with… >> READ MORE


Purpose of Pre-Filing UCC Financing Statements

UCC

What is Pre-filing? In a traditional funding cycle, a lender will order lien searches on potential borrowers at the start of a new deal. Based on the results of those searches (and other measures of creditworthiness) the lender decides whether to fund the applicant. If the lender elects to advance funds, the lender will file a UCC Financing Statement to perfect their security interest and secure a priority position to collect should… >> READ MORE


Don’t overlook a federal tax lien filed at the county

Tips, Lien Monitoring

Federal tax liens are regularly filed at county filing offices across the country, so your account monitoring process should include those jurisdictions. In our experience, we see many federal tax liens being filed at the county instead of the state filing office. A federal tax lien, whether filed at the state or the county, may affect your priority position; therefore it is critical to keep an eye on lien-holder activity at both the state… >> READ MORE


Importance of County-Level Lien Monitoring

UCC, Lien Monitoring

Once a creditor has filed a UCC Financing Statement they will want to do all they can to maintain their priority position throughout the life of the loan. Lien monitoring programs run interval searches on debtor names to check for any new filing activity, and then provide timely updates to alert a creditor to potential threats. Monitoring offers an easy and affordable way for a secured party to keep an eye on other lien-holder activity against… >> READ MORE


Bad Corporate Standing: What is it? How do I fix it?

Corporate

There are countless occasions in which a person could be asked to supply a certificate of good standing for their business, or where a lender or attorney acts to obtain one. Two of the most common scenarios are to register or qualify a company to transact business in another state, and to open a business banking account. A good standing certificate verifies that an entity is authorized to transact business in a given jurisdiction and… >> READ MORE


A Review of the Basic Filing Rules: UCC Change Statements [Part 3]

UCC

Could you use a refresher on UCC filing rules? You’re in luck! This week, we welcome guest author, attorney, Bennett L. Cohen to the blog! Read on for the second installment in his two-part blog series detailing the basic filing rules under Revised Article 9 of the Uniform Commercial Code. It's vitally important that UCC filers understand and observe the basic UCC filing rules under the Uniform Commercial Code (the "Code") described… >> READ MORE