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Risk Management Blog

UCC & Corporate Due Diligence

Resource Guide for Legal and Financial Professionals

Why Include Similar Names in Searches to Locate Tax Liens and Mis-Indexed Filings

UCC, Due Diligence, Revised Article 9 Something

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

UCC, Online UCC System, Due Diligence, Revised Article 9, Reduce Financial Risk, Tips Something

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


Wondering What Parties to Search as Part of Your Prefunding Due Diligence?

Corporate, Due Diligence, Revised Article 9, Tips Something

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 Secured Party Representative Service – Explained

UCC, Online UCC System, Revised Article 9 Something

UCC Secured Party Representative Service provides protection for secured lenders by using a representative’s name (instead of their own) in the Secured Party box on UCC Financing Statements. Under Revised Article 9, UCC Section 9-502(a)(2), a financing statement must provide the name of the secured party or representative of the secured party. The Secured Party Representative Service key aspect is that the code allows “a representative”… >> READ MORE


Does the control agreement govern if it conflicts with any of the customer agreements between Pledgor and Broker?

UCC, Due Diligence, Revised Article 9 Something

Attorney Bennett Cohen returns this week to continue his examination on control agreements for pledged securities accounts. This is part six in our eight part series on the topic of control agreements. To start from the beginning, please see the first post, Examining Issues with Control Agreements for Pledged Securities Accounts. Does the control agreement govern if it conflicts with any of the customer agreements between Pledgor… >> READ MORE


Does the control agreement go too far in limiting the potential liability of the Broker?

UCC, Due Diligence, Revised Article 9 Something

We're back this week with more in our series from attorney Bennett Cohen on control agreements for pledged securities accounts. This is the fourth post in our series, so if you need a refresher please visit his introductory post, Examining Issues with Control Agreements for Pledged Securities Accounts. We've reviewed quite a number of control agreements which provide that the Broker shall have no liability to the Lender except for… >> READ MORE


Does a lender need to take possession of the original leases to perfect its security interest in the equipment leases?

UCC, Revised Article 9, Reduce Financial Risk Something

Do you have UCC questions about equipment leases?  Are you at risk to losing priority to other creditors? Attorney Bennett Cohen of Illinois law firm Cohen, Salk & Huvard, P.C., gets asked questions like this all the time, and has taken the time to write some answers. You may also want to check out his eBook on Purchase Money Security Interests (PMSI). Pledges of Equipment Leases: Does a lender need to take possession of the… >> READ MORE


Does a lender need to file a precautionary UCC filing against the lessee of the equipment to perfect the lender’s security interest in the leased equipment?

UCC, Revised Article 9, Reduce Financial Risk Something

Do you have UCC questions about equipment leases?  Are you at risk to losing priority to other creditors? Attorney Bennett Cohen of Illinois law firm Cohen, Salk & Huvard, P.C., gets asked questions like this all the time, and has taken the time to write some answers. You may also want to check out his eBook on Purchase Money Security Interests (PMSI). Precautionary UCC Filings against Lessees of Equipment: Does a lender need… >> READ MORE


California Governor signs Assembly Bill 1858: Individual Debtor Name Safe Harbor

UCC, Legislation, Due Diligence, Revised Article 9 Something

For those managing personal property transactions in California, it is important to understand and be prepared for recent legislation that has been passed to provide a safe harbor for proper entry of individual debtor names when filing and searching for UCC Financing Statements. Effective January 1, 2015, California will join the majority of states in adopting legislation which governs the proper name identification of individuals. This… >> READ MORE


Broad Based UCC and Lien Name Searching – FCS Greatest Hits #1

UCC, Online UCC System, Due Diligence, Revised Article 9, Tips Something

We have published a lot of material on the topic of UCC searching over the years. Effective UCC searching can save you time and money, so this topic has been popular among our readers. Today, we are starting a six part blog series on the nature of broad based searching and search logic as it relates to UCC searching. Enjoy our first post, and please remember that these blog posts are for educational purposes only; always consult your legal… >> READ MORE