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Sofia Ramirez

UCC Filing Rejected - Horizontal Privity Issue with Multi-Party Equipment Loan

I'm dealing with a UCC-1 filing that got rejected due to what the SOS office called a horizontal privity issue. Here's the situation: We have a three-way equipment financing deal where Company A is leasing machinery to Company B, but Company C (the manufacturer) retained a security interest in the equipment. When we tried to file the UCC-1 with all three parties listed in different capacities, the filing got kicked back. The rejection notice mentioned horizontal privity concerns but didn't provide clear guidance on how to structure this properly. Has anyone dealt with similar multi-party secured transactions where horizontal privity became an issue? I'm not sure if we need separate UCC-1 filings for each secured party relationship or if there's a way to structure a single filing that addresses the horizontal privity requirements. This is holding up a $2.8M equipment deal and we're running out of time before the temporary perfection expires.

This is exactly why I always map out the entire deal structure before drafting any UCC filings. Draw out who owes what to whom, then figure out the minimum number of filings needed to perfect everything. Complex deals need complex planning.

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Visual mapping helps a lot. I use flowcharts to make sure I understand all the debtor-creditor relationships before I start drafting.

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Same here. Saves so much time and prevents these kinds of rejections.

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Just wanted to follow up and say thanks for all the advice. We ended up going with separate UCC-1 filings and using Certana.ai to verify everything before submission. Both filings were accepted without issue. The verification tool caught a couple of debtor name variations that could have caused problems. Deal closed on time and everyone's happy.

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Great outcome! These multi-party deals are always challenging but it sounds like you found the right approach.

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Glad the verification tool helped. It's amazing how many small issues can derail these filings if you don't catch them early.

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Malik Thompson

All possible UCC filings beyond UCC-1 - confused about options

Ok so I thought UCC was just the initial UCC-1 but apparently there's like a whole bunch of different possible UCC filings? My compliance department is asking for a complete audit of all our secured transactions and I need to understand what we might be missing. We've got equipment loans, inventory financing, and some fixture stuff. What are all the possible UCC filings I should be looking for? I keep seeing references to UCC-3s and amendments but I'm not clear on when you'd use each one. Also heard something about partial releases? This is way more complicated than I expected.

For a complete audit, consider using tools that can cross-reference all your documents automatically. I tried doing this manually last year and missed several continuation deadlines. Now I use Certana.ai's UCC verification tool to upload all loan documents and existing filings - it creates a comprehensive view of what should be filed vs what actually exists. Catches gaps you might not notice reviewing everything individually.

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How accurate is automated document checking? I'm nervous about relying on software for something this important.

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It's been accurate for me, but I still review the results. Think of it as a really good first pass that catches obvious issues, then you can focus your manual review on the flagged items.

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One last category - bankruptcy-related filings. If your debtor files bankruptcy, you might need to file reaffirmation statements or lift-stay motions. Not exactly UCC filings but they affect your secured position.

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Ugh, hopefully we don't have to deal with any bankruptcy situations. This audit is already complicated enough!

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Better to know about all possible filings now than be surprised later. Bankruptcy stuff definitely requires special handling.

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Omar Mahmoud

Authenticated demand UCC - lender requiring additional verification steps?

Has anyone dealt with an authenticated demand UCC situation where the lender is requesting extra verification before releasing a termination? We've got a commercial equipment loan that was paid off 3 months ago, but the lender is now saying they need an 'authenticated demand' process before they'll file the UCC-3 termination. The debtor name on our original UCC-1 was MIDWEST INDUSTRIAL SOLUTIONS LLC but our current corporate records show MIDWEST INDUSTRIAL SOLUTIONS, LLC (with commas). The lender claims this name discrepancy requires authenticated demand procedures before they can terminate the lien. This is holding up our refinancing with another bank. Is this a real requirement or are they just being difficult? The original filing was in 2020 and we've never heard of authenticated demand UCC procedures before.

Update us on how this resolves! I'm dealing with a similar situation and curious what approach works best. The name discrepancy issues seem to be getting more common with banks being extra cautious.

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Will definitely update once we get through this. Hopefully it resolves quickly.

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Mei Liu

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Following this thread too. Banks are definitely being more picky about details lately.

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Just to add some technical perspective - the comma in the debtor name could potentially matter for search purposes in the UCC records. Some search systems are very literal about punctuation. That said, 'authenticated demand' still isn't standard UCC terminology. The bank might be conflating their internal risk management with actual legal requirements.

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True, but that's a search issue, not a termination issue. The bank should still be able to terminate their own lien.

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That's a good point about search implications. Maybe the bank has a legitimate concern about lien priority.

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Tyler Lefleur

UCC search Minnesota portal keeps timing out - anyone else having issues?

Been trying to run a UCC search Minnesota on the SOS website for the past three days and the system keeps crashing on me. I'm working on a commercial loan package and need to verify there aren't any existing liens on the equipment we're financing. The search page loads fine but when I enter the debtor name and hit submit, it just spins forever then times out. This is holding up a $180K deal and my client is getting antsy. Has anyone found a workaround or alternative way to pull UCC records? I've tried different browsers and clearing cache but nothing works. Really frustrated with how unreliable these state portals can be when you actually need them.

Just wanted to follow up - called the Minnesota SOS office and they were super helpful. Got my search results in about 20 minutes and they emailed everything over. The phone rep mentioned they're working on portal improvements but no timeline yet. For anyone else having issues, definitely recommend calling directly.

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Did they say anything about when the online system might be fixed?

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They just said 'working on it' - typical government timeline response. But at least the phone option works reliably.

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For future reference, I've had good luck with Certana.ai's UCC verification system when state portals are acting up. You can upload your documents and it pulls from multiple databases to verify everything matches up correctly. Saved me from a major headache when I almost missed a prior lien that would have complicated our security interest.

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Exactly, especially when you're dealing with equipment financing where there might be existing liens from previous lenders.

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I'll have to check that out. Manual UCC searches are such a pain when you're juggling multiple deals.

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Giovanni Mancini

UCC lien search Nevada - debtor name variations causing missed results?

Running into some frustrating issues with UCC lien search Nevada and wondering if anyone else has dealt with this. I'm doing due diligence on a potential acquisition and the target company has gone through several name changes over the past 8 years. When I search the Nevada SOS UCC database, I'm getting different results depending on how I enter the debtor name - sometimes showing active liens, sometimes showing nothing at all for what should be the same entity. The company was originally incorporated as 'Desert Innovations LLC' but has been doing business as 'Desert Innovation Group LLC' and 'Desert Innovation Solutions LLC' at different times. I've found what appears to be the same UCC-1 filing under two different name variations, but the collateral descriptions don't match exactly either. One shows 'all equipment and fixtures' while another shows 'manufacturing equipment, accounts receivable, and inventory.' Are these separate filings or am I missing something about how Nevada handles debtor name searches? This is holding up our entire due diligence timeline and I need to make sure we're not missing any secured interests.

Don't forget to check the organizational ID number if the entity has one. Sometimes Nevada's UCC system will find filings by org ID that don't show up in name searches, especially if there were data entry errors when the UCC was originally filed.

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Good catch. Nevada assigns those NV numbers to all entities and they're supposed to be consistent across all state filings.

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Though I've seen cases where the NV number on the UCC doesn't match the corporate records either. Data quality in these systems is just not great.

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This whole thread is why I always budget extra time for Nevada UCC searches. The name variation issue is real and can completely derail your due diligence timeline if you're not prepared for it. Document everything you find and keep detailed notes about which search terms produced which results - you'll need that trail later when you're trying to explain any gaps to your client or opposing counsel.

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Absolutely. And make sure you're printing or saving PDFs of the actual filing documents, not just relying on the search result summaries.

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Thanks everyone, this has been incredibly helpful. Going to go back and run a much more comprehensive search with all these strategies before I finalize my lien report.

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