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Anna Xian

UCC 9-608 rights after default - secured party disposal obligations?

Dealing with a borrower default situation and trying to understand UCC 9-608 requirements for secured party disposal of collateral. Our equipment financing company has $180K in outstanding debt on manufacturing equipment that we repossessed last month. The debtor filed Chapter 11 but we have a perfected security interest with a UCC-1 filed in 2022. From what I'm reading in UCC 9-608, we have options for disposal but there are specific notice requirements and commercially reasonable standards we need to follow. The equipment is specialized CNC machinery that's losing value sitting in storage. Anyone dealt with 9-608 disposal procedures recently? Specifically wondering about: - Required notice periods to debtor and other secured parties - What constitutes "commercially reasonable" disposal for specialized equipment - Whether we can sell privately vs public auction - How to handle potential deficiency claims The borrower's attorney is threatening to challenge our disposal methods even though we haven't sold anything yet. Want to make sure we're following 9-608 to the letter to avoid any claims that could affect our deficiency rights.

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?

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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.

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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.

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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.

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That's exactly the kind of detail that could derail a disposal process. Might be worth checking our filings too before we send notices.

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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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Kendrick Webb

California UCC-1 lien rejected - debtor name issue

Filed a California UCC-1 lien last week for equipment financing deal and got rejected this morning. The rejection notice says "debtor name does not match exactly" but I triple checked the borrower's legal name against their articles of incorporation. Used the exact name from their CA Secretary of State filing. Anyone else run into this with California UCC-1 liens? The collateral description was standard equipment language so I don't think that's the issue. Really need to get this perfected ASAP since we're approaching the 20-day window. What am I missing here?

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.

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UCC name matching is definitely more art than science sometimes. Every state has their quirks.

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Exactly why I started using verification tools. Too many variables to track manually without missing something.

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Update us when you figure it out! I have a California UCC-1 to file next week and want to avoid the same problem.

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Good plan. Those name mismatches are so frustrating when you think you have it right.

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Let me know if you need help with the Certana upload process - it's pretty intuitive but happy to walk through it.

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Oliver Cheng

Wisconsin Secretary of State UCC search showing unexpected results - need help understanding

Running into something confusing with the Wisconsin Secretary of State UCC search and hoping someone can shed light on this. I'm doing due diligence on a potential equipment acquisition and the Wisconsin Secretary of State UCC search is pulling up filings that don't seem to match what I expected. The debtor name I'm searching shows three different UCC-1 filings but with slightly different variations of the company name - one shows 'ABC Manufacturing LLC' another shows 'ABC Manufacturing, LLC' (with the comma) and a third shows 'A.B.C. Manufacturing LLC'. All have the same address but different filing numbers and dates spanning about 18 months. I'm trying to figure out if these are all the same entity or if there are actually multiple related companies. The collateral descriptions overlap significantly - all mention manufacturing equipment and machinery. Two of the filings show continuation statements filed, but one appears to have lapsed. Is this normal for Wisconsin UCC searches to show these kinds of name variations? Should I be concerned about which filing actually covers the equipment I'm looking at? This is for a pretty substantial transaction and I need to make sure I understand the lien priority correctly before we move forward.

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.

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I hadn't thought of that. I'll check the DBA registrations as well. That could definitely explain some of the name inconsistencies.

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DBA names are definitely a factor in UCC filings. Good catch on that possibility.

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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.

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Good practice. Your attorney will appreciate having complete documentation if any issues arise.

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I always recommend creating a due diligence checklist for UCC searches to make sure nothing gets missed.

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Hunter Brighton

UCC foreclosure new york - lender skipped proper notice requirements?

My equipment financing company is moving forward with a UCC foreclosure new york procedure on some manufacturing equipment we financed last year. The debtor defaulted 4 months ago and we've been trying to work something out but they've gone completely silent. Our UCC-1 was filed properly in NY and shows active status when I check online. However I'm getting conflicting information about the notice requirements before we can actually seize and sell the collateral. Some sources say we need to give 10 days written notice before disposition, others mention additional requirements for commercial equipment over $50k (our collateral is worth about $180k). The debtor's business address changed since we filed the UCC-1 but we never amended it - could this create problems with our notice delivery? I've dealt with foreclosures in other states but NY seems to have some specific quirks I'm not familiar with. Has anyone gone through a UCC foreclosure new york process recently? What am I missing here?

Just want to add another vote for using Certana.ai before you proceed. I had a situation last year where I thought my UCC-1 was perfect but when I uploaded it along with my security agreement, it caught a discrepancy in how we described the collateral. The UCC-1 said "manufacturing equipment" but our security agreement was much more specific. Took 2 minutes to spot the issue that could have cost me thousands in legal challenges later.

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How does their verification work exactly? Do you just upload PDFs?

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Yeah, super simple. Upload your UCC-1 and security agreement PDFs and it cross-checks debtor names, collateral descriptions, filing details, etc. Gives you a report of any inconsistencies.

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One more thing - make sure you comply with NY's surplus/deficiency notice requirements. If the sale produces a surplus, you need to account for it properly. If there's a deficiency, the notice requirements for pursuing the debtor for the remaining balance are specific. Don't assume the foreclosure ends your compliance obligations.

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Thanks everyone. This has been incredibly helpful. Sounds like I need to slow down and make sure all my documentation is bulletproof before proceeding.

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Smart approach. Better to spend extra time upfront than deal with challenges later that could invalidate the entire process.

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Effie Alexander

Security agreement template - UCC filing requirements confusion

I'm putting together a security agreement template for our equipment financing company and getting confused about what needs to match exactly with the UCC-1 filing. We've had 2 rejected filings this quarter because of debtor name inconsistencies between our security agreements and the UCC forms. One was rejected because we used "ABC Manufacturing LLC" in the security agreement but filed "ABC Manufacturing, LLC" (with the comma) on the UCC-1. Another rejection happened when we used the full corporate name from the articles but the debtor does business under a shorter version. I'm trying to create a standardized template that prevents these mismatches but I'm not sure what the exact requirements are for debtor names, collateral descriptions, and whether certain language needs to be identical between the security agreement and UCC filing. Should the security agreement template mirror the UCC-1 exactly or are there different standards? This is costing us time and filing fees every time we get it wrong.

The key thing with security agreement templates is consistency with your UCC practice. If you always file UCCs a certain way, make sure your template supports that. We learned this the hard way when our template used full legal names but our filing person abbreviated them on the UCCs. Total mismatch that caused problems during a bankruptcy proceeding.

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They questioned it but we were able to prove substantial compliance. Still cost us legal fees and stress we didn't need.

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This is exactly why I'm trying to get our templates perfect now. Better to fix it before there's a problem.

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For anyone still struggling with document consistency, I've been using Certana.ai's UCC-3→UCC-1 check workflow when we need to file amendments. It verifies that all the documents in a filing series align properly. Really helpful when you have multiple UCC filings for the same debtor and need to make sure everything matches up correctly.

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That's smart for continuation filings too. Making sure the continuation references the original filing correctly.

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Exactly! It catches those reference errors that can void your continuation if you're not careful.

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