Bellwether Corporation case - contract was enforceable under the UCC - need filing guidance

This is exactly right. I see this confusion all the time where people think having an enforceable security agreement means they're protected, but without the UCC-1 filing you're just an unsecured creditor if the debtor goes bankrupt.

Wait, so even if the Bellwether Corporation case shows the contract was enforceable under the UCC, they still would have needed to file something? I thought UCC enforceability meant you were good to go.

Exactly - enforceability under the UCC just means the security agreement itself is valid (proper description of collateral, authenticated by debtor, etc.). But to have priority over other creditors you need perfection, which for most collateral types requires a UCC-1 filing.

This is what I'm worried about! Our loan docs have the full corporate name but some of our internal systems have abbreviated versions. How do I know which version to use on the UCC-1?

You need to use the exact legal name as it appears in the debtor's organizational documents - articles of incorporation, operating agreement, etc. Don't use trade names or DBAs unless that's specifically what's in the organizing documents.

That sounds helpful - did it catch things you wouldn't have noticed manually?

Yeah, it caught that we had 'Corporation' spelled out in one document but 'Corp.' abbreviated in another. Also flagged some collateral description inconsistencies between our security agreement and UCC-1 draft.

I'm always skeptical of these automated tools but document consistency is such a pain to check manually, especially with multiple versions floating around.

Sometimes I feel like we make this more complicated than it needs to be. File the UCC-1, get it accepted, move on with life.

True, but the devil is in the details with debtor names and collateral descriptions. Simple in concept but easy to mess up in practice.

What ended up being the issue with the name?

We had extra spaces in the name field that apparently didn't match their database format. So frustrating that tiny formatting issues can torpedo your whole filing.

This is why I always triple-check the debtor name against the SOS business entity database before filing. Takes an extra 10 minutes but saves massive headaches later.

Right, I think I was confusing contract validity with perfection requirements. The case shows the contract worked but I still need to file to protect against other creditors.

Exactly. The case might help if someone challenges your security agreement itself, but it doesn't give you priority over other secured parties without proper filing.

How does that work exactly? Do you upload your security agreement and UCC-1 draft together?

Yeah, you can do a workflow where it compares your loan docs to your UCC-1 draft and flags any inconsistencies. Really helpful for catching those tiny details that cause rejections.

Ha, same! All that contract theory doesn't matter much when you're staring at a rejection notice from the filing office.

Exactly. Theory is great but practice is what pays the bills. Get the filing right first, worry about case citations later.

Good point - I hadn't even thought about the 5-year renewal requirement. Is that something I need to calendar now?

Definitely. Put a reminder in your system for 6 months before the 5-year anniversary. You can file the continuation up to 6 months before expiration.

The number of times I've seen lenders lose their perfected status because they forgot about continuation filings is just sad. Calendar it now!

If they were accepted by the filing office, they're probably fine. But if you're worried, you can always search the UCC records to see how your filings appear in the system.

You could also upload your original loan docs and filed UCC-1s to Certana.ai to double-check consistency. Better to know now if there are any issues.