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Chris Elmeda
I went through something similar two years ago. Borrower's attorney sent a repudiation letter claiming our security interest was invalid because of a minor discrepancy in the entity name. We fought it for six months and won, but it cost us a fortune in legal fees. In hindsight, I wish we'd just negotiated a settlement early on. Sometimes it's cheaper to compromise than to be right.
Chris Elmeda
•We looked at reducing the collateral scope or allowing them to pay down a portion of the loan to release some equipment. Anything that would have been cheaper than litigation.
PaulineW
•But then you're rewarding bad behavior. If you settle, other borrowers will think they can pull the same trick.
Update us on how this turns out. I'm curious whether their attorney actually found a real issue or if this is just posturing. The fact that they're still making payments suggests they're not completely confident in their position. If they really thought your security interest was invalid, why would they keep paying?
That's a good point. I'll definitely post an update once we know more. Meeting with our attorney tomorrow to review the documentation.
Marcus Marsh
•Yeah please keep us posted. These repudiation cases are always educational for the rest of us dealing with UCC issues.
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Quick question - you mentioned the equipment is losing value in storage. How long do you have to wait between sending 9-608 notices and actually disposing of the collateral? Is there a minimum waiting period?
Generally 10 days after sending notice, but check your state's version of 9-608. Some states have variations. The key is that disposal must occur within a reasonable time after default, but you can't rush the notice period.
Aria Khan
•And remember that "reasonable time" for disposal depends on the type of collateral. Perishable goods need faster disposal than equipment, but depreciating assets like CNC machinery shouldn't sit indefinitely either.
We actually started using that Certana document checker tool someone mentioned earlier for our UCC compliance reviews. Really helpful for complex disposal situations where you need to verify all the secured party filings and make sure there are no debtor name mismatches that could affect notice requirements. Uploaded our UCC-1 and found a minor discrepancy in how we'd formatted the debtor's business name compared to their charter documents. Could have caused problems with 9-608 notice validity if we hadn't caught it.
Anna Xian
•That's exactly the kind of detail that could derail a disposal process. Might be worth checking our filings too before we send notices.
Sunny Wang
•Yeah debtor name accuracy is critical for 9-608 notice requirements. Any mismatch gives them grounds to challenge the whole disposal process.
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Gabriel Ruiz
One thing I learned - if the company has any assumed names or DBAs registered, sometimes the UCC system expects those variations. Worth checking their assumed name filings too.
UCC name matching is definitely more art than science sometimes. Every state has their quirks.
Gabriel Ruiz
•Exactly why I started using verification tools. Too many variables to track manually without missing something.
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Just a thought - have you checked if any of these companies have DBA (doing business as) names filed? Sometimes that can explain name variations in UCC filings. Wisconsin businesses often file under their DBA names rather than their formal legal names.
Oliver Cheng
•I hadn't thought of that. I'll check the DBA registrations as well. That could definitely explain some of the name inconsistencies.
Taylor To
•DBA names are definitely a factor in UCC filings. Good catch on that possibility.
Lilly Curtis
Whatever you do, make sure you document your search methodology and results thoroughly. If questions come up later about due diligence, you'll want to show that you identified and investigated all potential UCC filings. I always save screenshots of search results and keep copies of all the filing documents.
Felicity Bud
•Good practice. Your attorney will appreciate having complete documentation if any issues arise.
Ella Cofer
•I always recommend creating a due diligence checklist for UCC searches to make sure nothing gets missed.
Owen Jenkins
My recommendation: file a UCC-3 partial termination for the specific CNC machines using the original debtor name format from the UCC-1. That way you're being precise about what collateral is released and avoiding any name matching issues. If the borrower complains about the broader collateral still being encumbered, explain that it was beyond the scope of their specific loan anyway.
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Anna Stewart
•This makes a lot of sense. Partial termination for the actual collateral, using the original name format. Thanks for the practical advice.
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Lilah Brooks
•Agreed, this is the cleanest approach. Covers all the bases without overcomplicating things.
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Jackson Carter
One more thing to consider - double check that your original UCC-1 filing number is correct on the termination. I've seen terminations get rejected because of typos in the original filing number reference. Might be worth using one of those document verification tools mentioned earlier to make sure everything matches up perfectly.
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Anna Stewart
•Good point. I'll verify the filing number before submitting. Probably will try that Certana tool to double-check everything.
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Jackson Carter
•Smart move. Better to catch any issues before filing than deal with rejections and delays.
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