Understanding the Limitations of State Direct UCC Online Searches & New Alternative Solution
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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
Maximize UCC and Lien Search Results to Minimize Risk
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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?
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There are secured creditors and unsecured creditors. But what is the difference between secured creditors and unsecured 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
Risk Management and Due Diligence Tips For Asset-Based Lenders
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In concert with Commercial Finance Associations’ annual conference, below are links pertinent to CFA members about lien and documentation due diligence from previous blog posts. First Corporate Solutions is proud to once again support the CFA and we invite you all to explore the links below and then drop by our exhibit booth later this week. Let us know any questions and see you in Austin!
Are you considering ways to streamline and… >> READ MORE
Ordering a Civil Litigation Search: 5 Pieces of Information Your Searcher will Need from You
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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
Why Include Similar Names in Searches to Locate Tax Liens and Mis-Indexed Filings
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According to Revised Article 9 of the Uniform Commercial Code, a UCC Financing Statement is only effective if it gets the debtor name right. A UCC filing that fails to properly identify the debtor by their exact legal name will not offer the secured party priority status to collect should the debtor default or file for bankruptcy. Searchers often mistakenly interpret this to mean they only need be concerned with filings that provide an exact… >> READ MORE
Single Extra Space Creates Seriously Misleading UCC Debtor Naming Error
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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
Tips To Determine Which Party Names To Search When Lien Searching
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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
Wondering What Parties to Search as Part of Your Prefunding Due Diligence?
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Searching for the right party is imperative when coordinating due diligence search efforts. This may seem simple, but keep in mind that liens could be filed under business names, individual names, aliases or nicknames, even fictitious business names. So, how can you be sure you are searching for the right name?
Here are a few pointers to get you on the right track:
1. Check corporate charters to determine the exact legal name before… >> READ MORE
UCC Searching in Delaware
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With so many businesses organizing in Delaware, it has become a high volume UCC search state.
It is crucial to have a good working knowledge of a state’s search logic prior to ordering or performing UCC searches in that jurisdiction. Here are some important notes on UCC searching in Delaware:
Exact Name Search Logic
Search logic varies from state to state. Some states have online access to their UCCs offering broad-based search… >> READ MORE