UCC3 Financing Amendment and Termination Statements: Avoiding Loss - - PowerPoint PPT Presentation

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UCC3 Financing Amendment and Termination Statements: Avoiding Loss - - PowerPoint PPT Presentation

Sep 12, 2022 334 likes •586 views

Presenting a live 90-minute webinar with interactive Q&A UCC3 Financing Amendment and Termination Statements: Avoiding Loss of Lien Perfection or Priority TUESDAY, AUGUST 9, 2016 1pm Eastern | 12pm Central | 11am Mountain |

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The audio portion of the conference may be accessed via the telephone or by using your computer's

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Presenting a live 90-minute webinar with interactive Q&A

UCC3 Financing Amendment and Termination Statements: Avoiding Loss of Lien Perfection or Priority

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific TUESDAY, AUGUST 9, 2016

Jeffrey A. Wurst, Partner, Ruskin Moscou Faltischek, Uniondale, N.Y .

  • R. Marshall Grodner, Member, McGlinchey Stafford, Baton Rouge, La.

Jason I. Miller, Blank Rome, New York

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5

UCC3 Financing Amendment and Termination Statements: Avoiding Loss of Lien Perfection or Priority

  • Jeffrey A. Wurst
  • Ruskin Moscou Faltischek, P.C.
  • jwurst@rmfpc.com
  • R. Marshall Grodner
  • McGlinchey Stafford P.L.L.C.
  • mgrodner@mcglinchey.com
  • Jason I. Miller
  • Blank Rome L.L.P..
  • jmiller@blankrome.com
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SLIDE 6

6

What happened in GM?

  • Underlying Facts
  • Procedural History
  • Bankruptcy Court Decision (Gerber)
  • Delaware Supreme Court Decision (on

question certified from 2nd Circuit)

  • 2nd Circuit Decision
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7

Amendments

  • A UCC-1 can be amended by a UCC-3.

The UCC-3 can be used to:

  • Change the collateral description.
  • Change the name and/or address of

parties.

  • Add or delete parties.
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8

Amendments

  • Is it a Continuation, Amendment or

Termination?

  • What Difference Does it Make?

.

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9

Amendments

  • Practical Considerations:
  • Filling Out the UCC-3 Statement

Amendment

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Amendments

  • Miscellaneous Items to Remember
  • A financing statement that is amended by an amendment

that adds collateral is effective as to the added collateral

  • nly from the date of the filing of the amendment.
  • A financing statement that is amended by an amendment

that adds a debtor is effective as to the added debtor only from the date of the filing of the amendment.

  • You cannot delete all debtors from a financing statement.
  • You cannot delete all secured parties of record.
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Assignments

  • Rules – 9-514
  • Must:
  • Identify the File No. of the Initial Financing statement
  • Provide the name of the assignor
  • Provide name and address of the assignee
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Assignments

  • Permissive; not mandatory.
  • If no assignment is filed, then the

assignor remains the secured party of record, with the power to authorize the filing of amendments, including

  • terminations. 9-514 Comment 2.
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Assignments

  • Practical Considerations: Filling Out the UCC-3

Statement Amendment

  • Fill in File No. in Box 1a.
  • Check Box 3
  • For a full assignment
  • `

a. Add assignee’s name to Box 1a or 7b

  • b.

Add assignee’s address in Section 7c

  • For partial assignment, also:
  • a.

Check Box 8

  • b.

Check ASSIGN Collateral Box in Section 8

  • c.

Describe collateral assigned in the blank portion of Section 8 Fill in Box 9a or 9b

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Assignments

  • Practical Considerations:

Trafficking in Financing Statements.

  • Ex. SP1 makes a loan to D and files a Financing

Statement on 1/1/14. SP2 makes an loan to D and files a Financing Statement on 1/1/15. D pays off SP1, but no termination is filed. SP3 makes a new loan to D and gets an assignment from SP1 and files it on 1/1/16. In a priority contest between SP2 and SP3 who wins?

  • What if there was a subordination agreement between SP1

and SP2?

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15

Continuations

  • General Rule: The UCC’s general rule is

that a financing statement remains valid for a period of five years from the date of

  • filing. Unless a continuation statement is

properly filed before expiration of the five year period, the effectiveness of the financing statement will lapse.

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Continuations

  • Effect of Lapse
  • Time Limitations
  • Successive Continuation Statements
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Continuations

  • Content Requirements
  • For most types of personal property collateral, the

content requirements for an effective continuation statement are minimal. The document must

  • identify, by file number, the initial financing

statement to which it relates; and

  • indicate that it is filed as a continuation statement
  • Property Records
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Continuations

  • Is it a Continuation or Amendment?
  • What Difference Does it Make?
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Continuations

  • Exception to the Five Year Rule:

Mortgages as Financing Statements

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Terminations

  • Rule: 9-513
  • Consumer Goods
  • a. Must file when:
  • i. if there is no outstanding obligations or

commitments, or

  • ii. debtor did not authorize.
  • b. When?
  • i. One month after no outstanding obligations or

comments

  • ii. 20 days after demand from the debtor
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Terminations

  • All other collateral: Within 20 days of demand

from debtor if:

  • a.

except for accounts and chattel paper sold, no outstanding obligations or commitments;

  • b.

for accounts and chattel paper sold, if the account debtor or person obligated has paid;

  • c.

collateral is goods consigned to the debtor, but no longer in the possession of the debtor; or

  • d.

the debtor did not authorize the filing of the financing statement.

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Terminations

  • Upon filing a termination, the financing

statement ceases to be effective.

  • UCC3 Amendment.
  • a. Fill in Box 1a
  • b. Check Box 2
  • c. Fill in Box 9a or 9b
  • Terminations v. Releases.
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Pitfalls

  • Unauthorized Termination
  • Correction Statement
  • Lapse
  • Misleading Financing Statement
  • Assignments
  • Continuation following “Name Change”
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UCC3 Financing Amendment and Termination Statements: Avoiding Loss of Lien Perfection or Priority

  • Jeffrey A. Wurst
  • Ruskin Moscou Faltischek, P.C.
  • jwurst@rmfpc.com
  • R. Marshall Grodner
  • McGlinchey Stafford P.L.L.C.
  • mgrodner@mcglinchey.com
  • Jason I. Miller
  • Blank Rome L.L.P..
  • jmiller@blankrome.com