- New Nine: Tips and Reminders
- May 7, 2003 | Authors: Mary S. Ranum; Lynn M. Gardin
- Law Firm: Fredrikson & Byron, P.A. - Minneapolis Office
Now that Revised Article 9 of the Uniform Commercial Code (RA9) has been adopted in all 50 states, and is currently effective in 47 states, including Minnesota (the remaining three states have an effective date of January 1, 2002), you should keep in mind that:
- Financing statements are not signed. The secured party, by virtue of obtaining a security agreement, has authority to file a financing statement with the identical collateral description as contained in the security agreement. If the secured party desires to file a financing statement in advance of obtaining a signed security agreement or a financing statement containing a more abbreviated (or something different from the identical) collateral description, then the secured party needs a written authorization from the debtor to do so.
- Pre-July 2001 UCC financing statements remain effective. If you are providing new financing, remember that in addition to searching the new filing location, you will need to search in all places you would have searched prior to RA9's adoption.
- Many states have a limited search logic. We have discovered that many states, including Minnesota, have a search logic that will search for, and find, only those debtors with a name exactly as you give it to the searcher. This means that many pre-July 2001 filings that are still effective with a somewhat different name will not be included in a search covering only the debtor's legal name. For example, a pre-July 2001 filing with a debtor name and a "doing business as" trade name will not be included in a search of the debtor's name. If unsure, the best practice is to search multiple combinations of names.
- You need representations and covenants regarding the debtor's jurisdiction of organization. Since RA9 requires that financing statements against a debtor that is an organization be filed in the jurisdiction where the debtor is organized, you will want a representation about the debtor's place of organization and a covenant from the debtor that it will give you notice before the debtor changes its jurisdiction of organization. You should also obtain certified copies from the Secretary of State of the debtor's organizational documents so you can confirm the jurisdiction and the exact name.
- Move, before you amend, pre-July 2001 filings. If you need to amend a pre-July 2001 filing, you will need to be certain that it is filed in the correct post-July 2001 filing office first. You can accomplish the move by filing an "in lieu of" statement. In Minnesota, you can file an "in lieu of" statement which also contains the amendment. You will want to check other states regarding their practice of accepting one statement to accomplish both the move and the amendment.