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One more thing - if you're dealing with a revolver or line of credit, make sure your security agreement covers future advances. Otherwise you might only have a security interest securing the initial draw.
This is critical for revolving credit. I always include language like 'all obligations now existing or hereafter arising' to cover future advances.
Learned this the hard way on a deal where the debtor defaulted after several draws. Only the first advance was secured because of poor drafting.
Sounds like you've got the basics covered. The attorney is probably just being extra cautious or maybe they're not that familiar with Article 9. Have you tried suggesting a call to walk through their specific concerns? Sometimes it's easier to resolve these issues verbally than in endless email chains.
Good advice. Face-to-face or phone calls usually resolve document issues faster than email back and forth.
Yeah, I've found that when attorneys get into nitpicking mode, a quick call can sort out whether they have legitimate concerns or just don't understand the UCC.
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Update: I ran more searches and found the issue. Turns out the company changed their legal name slightly in 2023 but some lenders never filed UCC-3 amendments to update the debtor name on their filings. So I'm seeing old liens under the previous name format. Thanks everyone for the help!
That's a classic issue. Did the name change affect the validity of the older UCC filings or are they still enforceable?
Generally the old filings should still be valid as long as they were accurate when filed, but definitely something to discuss with your attorney for the acquisition.
This thread is super helpful. I'm bookmarking it because we do a lot of commercial lending in New Mexico and name variations are always an issue. The Certana tool mentioned sounds useful for avoiding these problems.
Yeah the document cross-checking feature is really handy for catching inconsistencies between corporate records and UCC filings.
Good to know there are tools out there to help with this stuff. Manual verification is such a pain.
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One thing to consider - even if you were supposed to send debtor notification, the failure might not void your security interest. It could just be a technical default that needs to be cured. Check what your loan agreement says about remedies for notification failures.
This is a good point. Most loan agreements don't make notification failure a basis for voiding the entire security interest.
I need to dig deeper into the loan agreement language. The notification clause is pretty vague about what happens if it's not followed.
Bottom line - your UCC filing creates a perfected security interest regardless of notification issues. Any notification problems are likely contractual matters that can be addressed separately. Don't let the debtor convince you that your lien is invalid just because of notification confusion.
Thanks everyone. This has been really helpful in understanding the difference between UCC requirements and contractual obligations. I feel much better about my position now.
Glad we could help clarify things. These notification issues trip up a lot of people but they're usually not as serious as they first appear.
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The interstate business relocation thing is tricky. Your Florida UCC-1 stays active for its full term (usually 5 years) even if you move states, unless it gets properly terminated or amended. But if your lender didn't file new UCC-1s in Georgia, they might not have a perfected security interest in your new state. Creates a legal gray area that benefits nobody.
Definitely. Check both states to see what's active under your old and new business names.
I used Certana's tool for exactly this situation. Uploaded our loan docs and it flagged that we had UCC-1s in two different states with slightly different debtor names. Helped us clean everything up before it became a problem.
Just my 2 cents but I'd treat this like any other potential scam until proven otherwise. Call your lender, verify everything, and don't pay any fees to mystery companies. The UCC system has enough legitimate complexity without adding scammers to the mix.
Good point. I was starting to panic but you're right - verify first, panic later if needed.
Exactly. Most UCC problems have straightforward solutions once you get the facts straight.
Ingrid Larsson
omg this is giving me flashbacks to my own SD filing nightmare last summer. took 3 weeks to get resolved
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Carlos Mendoza
•What finally worked for you?
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Ingrid Larsson
•ended up having to mail a paper filing with a check. their online system was just broken for my particular situation
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Miguel Hernández
Update us when you figure it out! These SD payment issues seem to be getting more common and it would help others to know what the actual solution was.
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Yuki Tanaka
•Good plan. Usually it's something simple that you just can't see without fresh eyes or better tools.
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Zainab Mahmoud
•Keep us posted! I do a lot of SD filings and this info would be super helpful.
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