Risk Management Blog

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

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

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

A couple of weeks ago, we featured a post on the blog titled, "Costs for Performing UCC, Lien and Litigation Searches" in which we discussed the types of fees you may encounter when hiring a service company to perform public records research, including: service fees, correspondent/agent fees, statutory/jurisdictional fees and copy costs. In this week’s blog post, we are going to share some additional information on copy costs and offer… >> READ MORE

If you’re like me when I was first introduced to this industry, you might be a little confused about the difference between judgments and judgment liens. They are two separate animals, and it’s important to know the difference if you’re trying to determine which to search for when doing your due diligence. The easy definition is that a judgment is an official decision rendered by the court with regard to a civil matter. A judgment… >> READ MORE

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

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

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