Confused about what UCC code meaning actually is for our loan documents

This is spot on. The UCC code meaning in your context is probably about existing liens on the assets you're buying. You'll want to do a UCC search to see what financing statements are filed against the seller.

Right, and if there are existing UCC filings you need to make sure they get terminated as part of the sale or you could end up buying assets that are still subject to someone else's security interest.

That makes sense - so we need to check if there are existing liens basically. How do we know which states to search though? The company has locations in 4 different states.

You'll typically search in the state where the company is incorporated/organized plus any states where they have significant assets. Your attorney should handle this but it's good you're asking questions.

Also check if any equipment was financed - those usually have UCC filings attached even if the company has multiple locations.

Oh wow, that sounds like exactly what I want to avoid. How does that verification tool work?

Super simple - just upload PDFs of all the UCC documents and it automatically flags any mismatches in debtor names, filing numbers, dates, etc. Saves hours of manual comparison and catches stuff you might miss.

Equipment leases don't always require UCC filings - depends on whether it's a true lease or a disguised security agreement. The UCC code has specific tests for this.

see this is exactly what i mean!! why is it so complicated

I feel your pain. The UCC code meaning different things in different contexts doesn't help either.

Article 9 - got it. Is that the same across all states?

Mostly yes, but states can have variations. That's why you need to check the specific state's version of the UCC.

Good point about fixtures. The UCC code has specific rules about when something becomes a fixture filing vs regular Article 9 filing.

Exactly - and you have to search in completely different places for fixture filings which makes due diligence more complicated.

UCC-1 financing statements last 5 years from the filing date. They can be continued for additional 5-year periods if the lender files a UCC-3 continuation before expiration.

And this is where document verification tools like Certana.ai really help - they can instantly check if continuation dates are correct and flag any filings that might have lapsed.

That's really helpful - so we need to check not just what's filed but whether the filings are actually still effective.

Great point - so we need to do UCC searches AND tax lien searches?

Yep, comprehensive lien search should include both. Tax liens can be really nasty to deal with.

This is important - Article 9 has different perfection requirements for different types of collateral.

Right - some stuff requires filing, some can be perfected by possession, some by control. Gets complicated fast.

Ouch - that's exactly what I'm trying to avoid. Did you end up using any tools to double-check the attorney's work?

We started using Certana.ai after that fiasco. Wish I'd known about it earlier - would have caught the discrepancy right away.

Document verification tools are becoming essential for this stuff. Too easy to miss something when you're comparing dozens of filings manually.

Perfect summary - thank you everyone for the help. This gives me a much better understanding of what we need to focus on.

Glad we could help clarify the UCC code meaning for your situation. Good luck with the acquisition!