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Where to File
One of the most significant changes introduced by revised Article 9
is the state and places within the state where
financing statements (UCC-1) must be filed. These changes will
centralize almost all financing statements. As a result it should be
much easier for a secured creditor to perfect its security interest,
especially in transactions involving debtors with multi-state
operations.
One significant change is the elimination of the need to file a
financing statement in a local office (county, township, city) for
collateral that is not related to real estate. Fixtures, uncut timber
and extracted collateral will still require local filing. Extracted
collateral covers oil, gas, and minerals where the security agreement
attaches upon extraction and accounts where the sale occurs at the
well or mine head. Cut timber is classified as goods under the revised
Code and only requires filing at the state level.
Consumer goods, farm equipment, inventory, equipment and
intangibles will only require state or
centralized filing. The jurisdiction for filing is determined by the
state where the debtor resides for proprietorships and partnerships.
In the case of corporations and limited liability companies it is the
state where the entity was organized. Thus, the majority of
filings under the revised Code will occur in states such as Delaware
and Nevada. Under the old Code filing was determined by where the
collateral was located. Thus, it becomes important for the secured
creditor to determine where the organization was organized to insure
proper filing. Also many states now require the organizations I.D.
number to perfect. This differs from the tax I.D. number in that it is
the number assigned by the corporation’s office when the
organization is incorporated.
Types of Collateral
In addition to all of the collateral covered under the old Code,
revised Article 9 includes collateral not previously covered. Under
the new Code the following may be perfected as collateral by filing a
financing statement: consensual liens on commercial tort claims,
health care receivables, agricultural liens, promissory notes, and
instruments.
However, it is important to understand that that even though
perfection is achieved by filing the financing statement in
instruments it does not give the secured creditor a priority over
another creditor who possesses the instrument.
I wish you well.
THE INFORMATION CONTAINED IN THE ABOVE ARTICLE IS PRESENTED FOR
INFORMATION
ONLY AND IS NOT PROVIDED AS LEGAL ADVICE. LEGAL ADVICE SHOULD BE
OBTAINED FROM
COMPETENT, LICENSED ATTORNEYS PREFERABLY BOARD CERTIFIED IN
CREDITORS RIGHTS
OR APPLICABLE LAW. |