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© Corporation Service Company®. All Rights Reserved.

What You Need to Know for UCC Searching and Filing

© Corporation Service Company. All Rights Reserved.

Your Presenter

Lacey BowerFinancial Account Manager

Corporation Service Company

• Speaker on UCC searching and filing best practices

• Works with banks of all sizes, lenders, lessors, and manufacturing companies


• Founded: 1899• Headquartered: Wilmington, DE• Years serving financial industry: >60• UCC transactions processed annually:

>6m• UCC transactions monitored: >8m

History & Values

Vital stats: Largest U.S.-owned provider of lien related services, registered agent, entity & litigation management, and digital brand services


• Questions to Ask• Searching• Filing• Monitoring• CSC Tools• Demonstration• Graduation

Recipe For sUCCess

Questions to Ask


• Are you following searching and filing best practices?

• Are you filing against the right debtor names every time?

• Are you monitoring your portfoliofor changes that may affect yourlien position?

Questions to Ask

Searching


Review of Searching Best Practices

Individuals



IndividualsThe starting point for every UCC search conducted on an individual is the driver’s license.



Registered Organizations

IndividualsThe starting point for every UCC search conducted on an individual is the driver’s license.




Individuals

Use the Public Organic Record.

The starting point for every UCC search conducted on an individual is the driver’s license.




Individuals

Collateral administeredby decedent’s

personal representative






Individuals





Search the name of the decedent.




Individuals






Collateral held in a trustthat is not a registered

organization




Individuals







organization

Search on the name put forth in the trust documents. If there is no name, search on the settlor.




Individuals







organization

Search on the name put forth in the trust documents. If there is no name, search on the settlor.

ALWAYS include name variations for due diligence purposes.


State Search Logic: What You Must Know

• The state’s search logic in minute detail




• How the search will perform underALL circumstances




• How the search will perform underALL circumstances

• The state’s historical indexing practices


Example of State Logic

Name Searched Record above found?THE MCKERN Not Found



Name Searched Record above found?THE MCKERN Not FoundMCKERN Not Found



Name Searched Record above found?THE MCKERN Not FoundMCKERN Not FoundTHE MCKERNON GROUP Not Found



Name Searched Record above found?THE MCKERN Not FoundMCKERN Not FoundTHE MCKERNON GROUP Not FoundTHE MCKERNON GROUP, INC. Not Found



Name Searched Record above found?THE MCKERN Not FoundMCKERN Not FoundTHE MCKERNON GROUP Not FoundTHE MCKERNON GROUP, INC. Not FoundMCKERNON GROUP, INC. Found



Name Searched Record above found?THE MCKERN Not FoundMCKERN Not FoundTHE MCKERNON GROUP Not FoundTHE MCKERNON GROUP, INC. Not FoundMCKERNON GROUP, INC. FoundMCKERNON Found



Name Searched Record above found?THE MCKERN Not FoundMCKERN Not FoundTHE MCKERNON GROUP Not FoundTHE MCKERNON GROUP, INC. Not FoundMCKERNON GROUP, INC. FoundMCKERNON FoundMCKERNON GROUP, INC. THE Found

Filing


Choose the correct debtor name

Filing: Get the Debtor Name Right

• Understand theimpact of the2010 Amendments

• Follow best practices forfiling against individualsand registered organizations


Only if

• Debtor name must be exactly what appears on the individual’s driver’s license

• Sometimes called “Alternative A”

• Very strict for filer

• If license is expired or not issued by filing state, default to safe harbor

Individual Debtor Names


Safe harbor

• Name can be what appears on drivers license, but other names may work as well

• Sometimes called “Alternative B”

• More forgiving for filer

Individual Debtor Names

Only if

• Debtor name must be exactly what appears on the individual’s driver’s license

• Sometimes called “Alternative A”

• Very strict for filer

• If license is expired or not issued by filing state, default to safe harbor


RIMA

CTNJDEMDDC

AK

HI

AZ NM

ND

FL

LA

WVCA

OR

WAMT

ID

NVUT

WY

CO

SD

NE

KS

OK

TX

MN

IA

MO

AR

WI

IL

MI

IN OH

KYTN

MS AL GASC

NC

VA

PA

NY

MENHVT

Enactments and Legislative Status of the2010 Amendments to UCC Article 9

Enacted with Alternative AEnacted with Alternative BLegislation Failed or Not Introduced

PR


Resources on Individual Debtor Name Requirements


Corporate Debtor Name Best Practices

Corps/LLCs



Corps/LLCs Public organic record



Corps/LLCs

Government charter entity(Farm Credit Bank)

Public organic record



Corps/LLCs



Charter document



Corps/LLCs


Business trusts(Massachusetts)


Charter document



Corps/LLCs




Charter document

Record filed with the stateunder state law



Corps/LLCs



Entity created bylegislation (ex: Fannie Mae)


Charter document

Record filed with the state under state law



Corps/LLCs



Entity created bylegislation (ex: Fannie Mae)


Charter document

Record filed with the state under state law

Statute that created the entity


Formation Documents:Network Solutions, Inc.

Debtor name filed on UCC: Net work Solutions, Inc.

In re Receivables Purchasing Covs. R & R Directional Drilling LLC

Crossing Your t’s & Dotting Your i’s


Formation Documents:Network Solutions, Inc.

Debtor name filed on UCC: Net work Solutions, Inc.

In re Receivables Purchasing Covs. R & R Directional Drilling LLC


LOST A CLAIM FOR

$80,000


Formation Documents: K. W. M. Electronics Corporation

Debtor name filed on UCC: KWM Electronics Corporation

In re Host America Corporation v Coastline Financial Inc.



Formation Documents: K. W. M. Electronics Corporation

Debtor name filed on UCC: KWM Electronics Corporation

In re Host America Corporation v Coastline Financial Inc.


LOST A CLAIM FOR

$295,000


Formation Documents:Tyringham Holdings, Inc.

Debtor name filed on UCC: Tyringham Holdings

In re Tyringham Holdings, Inc.



Formation Documents:Tyringham Holdings, Inc.

Debtor name filed on UCC: Tyringham Holdings

In re Tyringham Holdings, Inc.


LOST A CLAIM FOR

$310,000


UCC Filings: Where to File

General Rule• File in central filing

office where debtor is located• Exceptions: GA, LA

Collateral Exceptions• Fixtures• Timber to be cut• Minerals to be extracted

Filing Location for Collateral ExceptionsOffice where a mortgage would be recorded on the affected real property

GALA

File at parish level

File at county level


UCC Filings: Location of Debtor

IndividualLocation of principal residence

Jurisdictions Without Filing RequirementDistrict of Columbia

Other Non-Registered OrganizationAt place of business—chief executive office if more than one

Registered Organization Under Federal LawWhere designated by law or D.C.

Registered Organization Under State LawWhere organized or incorporated

Monitoring


• Changes in your debtor’s name or status can affect your lien position.

• It’s crucial to monitor your portfolio for changes and to prevent lapsed filings.

• There are simple, automated ways to receive alerts when things change.

Portfolio Monitoring


• Email notifications of approaching dates

• Copies of acknowledgements

• Filing numbers auto-populated into UCC-3

• Flexible reporting

• The notification frequency of your choice

Expiration Tracking

The most common post-perfection event that requires prompt secured party action is a change in the debtor’s name.

Case Study


In Re: Lifestyle Home Furnishings, LLC

Failure to File Debtor Name Amendment Leaves Lender Partially Unperfected 2010 Bankr. LEXIS 111

(D. Idaho, Jan. 14, 2010)



Ownership of Factory Direct,LLC changed


(D. Idaho, Jan. 14, 2010)




New owners changed name from

“Factory Direct, LLC” to “Lifestyle Home Furnishings,

LLC”


(D. Idaho, Jan. 14, 2010)






LLC”

Debtor did not notify the bank

of its name change


(D. Idaho, Jan. 14, 2010)






LLC”


of its name change

Consequently, the bank did not file an amendment or a new financing

statement


(D. Idaho, Jan. 14, 2010)






LLC”


of its name change


statement

On April 7, 2008, the Debtor filed for Chapter 7

bankruptcy


(D. Idaho, Jan. 14, 2010)






LLC”


of its name change


statement

On April 7, 2008, the Debtor filed for Chapter 7

bankruptcy

Trustee filed an adversary proceeding to avoid the bank’s security interest and moved for a partial summary judgment on

the grounds that the bank became unperfected four months after the Debtor changed its name


(D. Idaho, Jan. 14, 2010)


Notifies you when a corporate debtor ...

• Changes their corporate name

• Falls out of good standing

• Dissolves or merges

Corporate Tracking


• Alerts you to new filings against your debtor, including new lending and terminations (even yours!)

• Sends email alerts with link to thetracking results

• Allows you to evaluate findings and request copies if needed

Debtor Tracking


Any delay in responding to bankruptcy filings can be costly

Monitors court records and compares them to your

• Debtor Name• Street Address• City• State• Zip Code

Bankruptcy Tracking


CSC Tools

• Secured Party Representation

• CSCTransactionWatch

• Expert’s Corner

• B2B UCC Integration withLoan Origination System

Arm Yourself


• UCC financing statements are public record

• Anyone can access your customer list

• Using a secured party representative prevents competitors from identifying filings

• SPRS centralizes inquiries

Secured Party Representation


CSC provides you with an archive of filing office closings and communications, pending and new legislation, UCC Article 9 updates.

Stay Informed of Industry Developments

CSCFinancial OnlineDemo


Lacey BowerFinancial Account Manager

Corporation Service Company

800-927-9801 [email protected]

Thank you for attending!

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