SOURCE: CT Lien Solutions

CT Lien Solutions

November 16, 2010 09:38 ET

UCC Article 9 Amendments: New Proposals May Impact Lenders, Lessors and Law Firms

CT Lien Solutions Identifies and Provides Guidance on Updated Procedures in Governing Law

NEW YORK, NY--(Marketwire - November 16, 2010) -  As the year comes to a close, lenders, lessors and law firms need to prepare for the first changes to the Uniform Commercial Code (UCC) Article 9 in more than a decade. To prepare for the 2013 Revised Article 9 amendment package, adopted in July 2010 by the National Conference of Commissioners for Uniform State Laws (NCCUSL), CT Lien Solutions, the most comprehensive provider of lien management, debtor due diligence, monitoring and risk management solutions to lenders, law firms and corporations, has highlighted some of the amendments that will have the greatest impact on UCC search and filing practices. CT Lien Solutions is part of Wolters Kluwer Corporate Legal Services.

While the full text of the amendments can be found on the University of Pennsylvania Law School Web site, CT Lien Solutions has identified the ones it predicts will have the greatest impact:

  • Changes to Definitions found in 9-102: Currently, the correct debtor name to use when filing a financing statement against a debtor that is a registered organization is the name on the "public record." Due to confusion around what constitutes a "public record," the amendments now refer to a "public organic record." This record is available for public inspection and consists of the record initially filed with or issued by a state to form an organization.
  • New Subsections to Section 9-316: This section will be renamed "Effect of Change in Governing Law," and new subsections, (h) and (j), will be added to address two narrow situations. First, addressing situations where collateral is acquired by a debtor after the debtor's location to a new jurisdiction, and second, addressing collateral acquired by a new debtor when the new debtor is in a different location from the original debtor.
  • Changes to Debtor Name Provisions: Where the current lien management code does not contain guidance with regard to determining correct individual debtor names, the amendments contain two alternative provisions, known as the "only if" and "safe harbor" options. It will be up to each state legislature to choose the alternative that fits the needs of its constituents.
  • Organizational Information on Filing Statement: Of the reasons why a record could be rejected, Article 9 previously required rejection if the financing statement did not provide the type or jurisdiction or the debtor organization or organizational ID number of the debtor. The amendments will delete this section and these fields will be removed from the national UCC forms.
  • National UCC Forms: The amendments will include new national UCC forms (UCC-1 and UCC-3), which have been carefully designed by the International Association of Commercial Administrators (IACA) in conjunction with NCCUSL and the lending and leasing industries. The proposed forms can be found here: Draft UCC Forms.

"Awareness and adherence to Article 9 changes are particularly important because they govern transactions where security interests are taken on personal property. With the economy still in flux, lenders need to know how to property protect themselves against the possibility of bankruptcy, where secured creditors take precedence," said Gene Lasky, executive vice president and general manager, CT Lien Solutions. "While reading the full text of the amendments is important, those impacted need to work with an experienced provider of risk management solutions who understands the implications and can help clients plan ahead. CT Lien Solutions has taken a leading role in that."

About CT Lien Solutions
CT Lien Solutions has more than 30 years experience in the UCC industry with connections to every jurisdiction in the nation. Providing comprehensive lien management, debtor due diligence and monitoring and risk management solutions, CT Lien Solutions provides lenders, law firms and corporations with the tools to perfect and maintain their security interests with the flexibility, accuracy and speed they demand. Its robust technology platforms and nationwide service experts follow the highest standards in public document search, recordation and portfolio management. For more information, visit the CT Lien Solutions Web site or follow @CTLienSolutions on Twitter.

About Wolters Kluwer Corporate Legal Services
Wolters Kluwer Corporate Legal Services is a business of Wolters Kluwer, a market-leading global information services company with annual revenues (2009) of EUR 3.4 billion ($4.8 billion) and approximately 19,300 people worldwide. Visit www.wolterskluwer.com.

Contact Information

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    Stacy Nobles
    Wolters Kluwer Corporate Legal Services
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    Ashleigh Egan
    Articulate Communications Inc.
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