Risk Management Blog

Before using any online UCC or lien search system, be sure to evaluate it carefully to understand its limitations A growing number of state filing offices are offering UCC search databases at low to no cost via their websites. In an effort to keep due diligence costs low, many searchers are turning to state direct online databases to fulfill their UCC search requirements. It’s easy to understand the appeal of these state direct… >> READ MORE

Most of us have heard that a large number of businesses choose to file their organizing paperwork in the State of Delaware. In fact, more than half of the corporations that make up the Fortune 500 are incorporated in Delaware. Why is that? Easy and Affordable The State of Delaware makes it easy and affordable to set up shop. The fees for filing organizing paperwork in the state are low compared to most other states and businesses that… >> READ MORE

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

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

In a recent blog post titled, “Ordering a Civil Litigation Search: 5 Pieces of Information Your Searcher Will Need From You,” we mentioned that when ordering a litigation search, your searcher will be expecting you to provide direction as to which specific court they should visit.  Several readers responded, saying that they could use some help figuring out what court to search. First Corporate Solutions cannot offer any legal advice… >> READ MORE

One of the basic tenets of the Uniform Commercial Code holds that a terminated UCC filing ceases to be effective. So how can a terminated UCC not really be terminated? There are two scenarios. Scernario 1: When the UCC record contains more than one secured party of record. Under the Uniform Commercial Code, when multiple secured parties exist for a single UCC record, a single secured party can act as representative and file a termination… >> READ MORE

Conscientious searchers know that an exhaustive pre-funding due diligence investigation will include a search of court records for civil litigation involving their prospect. Not being attorneys however, many are unsure of what to order or what information they will need to provide to get the ball rolling. In addition to the search name, there are five basic pieces of information you will need to supply in order to secure a relevant and… >> READ MORE

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

A recent court ruling in Wisconsin once again has affirmed the supreme importance secured parties must place on their data entry procedures when naming debtors on financing statements to perfect their security interests. A recap of the case can be found here. Once again, a typo in the debtor name created a UCC filing that was judged to be seriously misleading, and therefore left the secured party’s security interest with the debtor… >> READ MORE

Searching the correct party and correct legal name is imperative when coordinating due diligence search efforts. It is important to search all names under which liens could be filed. This may seem simple and obvious, but keep in mind that liens, particularly involuntary liens like federal tax liens and judgment liens, could be filed under business names, individual names, aliases, nicknames, or even fictitious business names. So,… >> READ MORE