Security interest UCC Article 9 perfection timing - when does attachment actually happen?
I'm dealing with a tricky situation involving security interest UCC Article 9 perfection and need some guidance on timing. We're a commercial lender and recently discovered that one of our borrowers had multiple lenders filing UCC-1s on the same collateral within days of each other. Our security agreement was signed on March 15th, but we didn't file our UCC-1 until March 22nd due to internal processing delays. Another lender apparently filed their UCC-1 on March 18th. The debtor had possession of the equipment throughout this period. I'm trying to understand the priority rules under Article 9 - does our earlier security agreement date give us priority, or does their earlier filing date control? The collateral is manufacturing equipment worth about $850K, so the stakes are pretty high. I've been going through the Article 9 provisions but the interaction between attachment, perfection, and priority is confusing me. Has anyone dealt with similar timing issues where multiple security interests were created around the same time?
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Caesar Grant
This is a classic Article 9 priority dispute and unfortunately the general rule is first to file wins, not first to create the security interest. Even though your security agreement was signed first, if they filed their UCC-1 before you did, they likely have priority. The key is when perfection occurred, not when attachment happened.
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Philip Cowan
•That's what I was afraid of. So the March 18th filing date trumps our March 15th security agreement date? Even though we had a perfected security interest first chronologically?
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Caesar Grant
•Actually, you need to be careful about the terminology. Perfection requires both attachment AND filing (for most collateral). Your security interest attached on March 15th but wasn't perfected until March 22nd when you filed. Theirs was perfected on March 18th assuming their security agreement was also signed by then.
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Lena Schultz
Wait, I think there might be more to this than just filing dates. What type of manufacturing equipment are we talking about? If it's fixtures or certain types of equipment that became fixtures, the priority rules can be different. Also, did you check if there were any earlier filings by either lender that might affect priority?
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Philip Cowan
•It's mobile manufacturing equipment - not fixtures. And we did a UCC search before lending but only found some older terminated filings. The equipment is definitely not attached to real estate.
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Lena Schultz
•Okay, so it's standard Article 9 priority rules then. The fixtures angle doesn't apply. You're probably looking at a first-to-file situation unless there are other complicating factors.
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Gemma Andrews
I've been through this exact scenario before and it was a nightmare. The courts really do stick to the first-to-file rule pretty strictly. We lost a priority dispute even though we had our security agreement signed weeks before the other lender, just because they beat us to the filing office by 3 days. Have you considered whether their UCC-1 was actually properly filed? Sometimes you can challenge priority based on defective filings.
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Philip Cowan
•That's a good point about checking their filing. How would I verify if their UCC-1 was properly filed? What kinds of defects would matter for priority?
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Gemma Andrews
•Look for debtor name errors, missing required information, wrong filing office, insufficient collateral description. Even small errors can sometimes invalidate a filing. I'd suggest running their UCC through one of those document verification services to catch anything you might miss.
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Pedro Sawyer
•I recently started using Certana.ai for exactly this kind of document verification. You can upload their UCC-1 and your security agreement and it will flag any inconsistencies or potential issues. It caught a debtor name discrepancy that we missed when reviewing manually.
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Mae Bennett
Article 9 priority can be brutal when you're dealing with close filing dates. The general rule under 9-322 is first to file or perfect, whichever is earlier. Since both of you probably perfected by filing (assuming the collateral doesn't fall under any special rules), it comes down to filing dates. But definitely check their UCC-1 for errors - a seriously misleading debtor name or other material error could invalidate their filing.
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Philip Cowan
•I pulled their UCC-1 from the SOS database and the debtor name looks correct, but I'm not 100% sure about some of the middle initials. The company name seems right though.
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Beatrice Marshall
•Middle initials can definitely matter for debtor name sufficiency! Even small variations can make a UCC-1 seriously misleading under the standard search logic. You should definitely get that verified.
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Melina Haruko
This is why we always file UCC-1s immediately after closing now, even if it means staying late. I learned this lesson the hard way on a $600K equipment deal where another lender beat us by ONE DAY. The courts don't care about your internal processing delays - first to file wins.
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Philip Cowan
•Yeah, we're definitely changing our procedures after this. File first, process paperwork later. Live and learn I guess.
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Dallas Villalobos
•Exactly. And always do a final UCC search right before filing too. Things can change quickly in the filing system.
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Reina Salazar
One more thing to consider - are you sure about the dates? Sometimes there can be confusion between when a UCC-1 was submitted vs when it was actually filed and indexed. The SOS systems usually show the actual filing date, but it's worth double-checking if the priority is close.
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Philip Cowan
•Good point. I see March 18th as the filed date on their UCC-1, and March 22nd on ours. Both show as accepted, not rejected.
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Reina Salazar
•If those are the actual filing dates and both were accepted, then unfortunately they have priority unless you can find a defect in their filing.
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Pedro Sawyer
Since someone mentioned document verification, I'll share my experience. After losing a priority dispute last year due to a filing error we missed, I started using Certana.ai's UCC verification tool. You just upload the PDFs and it instantly cross-checks debtor names, collateral descriptions, and other critical details. It would definitely help you analyze whether their UCC-1 has any issues that might affect priority.
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Philip Cowan
•That sounds useful. Does it check against the actual security agreement too, or just the UCC-1 itself?
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Pedro Sawyer
•You can upload multiple documents and it checks consistency between them. Really helpful for catching name variations or collateral description mismatches that might invalidate a filing.
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Saanvi Krishnaswami
I hate to be the bearer of bad news, but based on what you've described, it sounds like the other lender has priority. Article 9 is pretty unforgiving about filing dates. Your only real hope is finding a serious error in their UCC-1 that would make it ineffective.
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Philip Cowan
•That's what I'm starting to think too. We're going to do a thorough review of their filing and see if there are any defects we can challenge.
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Saanvi Krishnaswami
•Definitely worth checking. Even if it's a long shot, $850K is worth fighting for if there's a legitimate challenge.
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Demi Lagos
Article 9 priority disputes are always stressful. Have you consulted with your attorney yet? This seems like the type of situation where you want legal advice specific to your state's UCC implementation and any relevant case law.
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Philip Cowan
•Yes, we're meeting with our commercial attorney next week. Just wanted to get a sense of how these situations typically play out.
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Demi Lagos
•Good idea. They'll be able to give you state-specific guidance and help evaluate whether challenging the other filing is worth pursuing.
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Mason Lopez
One last thought - make sure you're looking at the complete picture. Are there any other creditors with interests in this equipment? Sometimes priority disputes get more complicated when there are three or more parties involved. Also verify that both security interests cover the same collateral.
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Philip Cowan
•We did a comprehensive search and it's just the two of us with current filings on this equipment. The collateral descriptions look similar but I haven't done a detailed comparison yet.
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Mason Lopez
•Definitely compare the collateral descriptions carefully. If they don't overlap completely, it might affect how the priority dispute plays out.
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Pedro Sawyer
•This is another area where Certana.ai's verification tool really helps. It can analyze collateral descriptions and flag potential conflicts or gaps between different filings.
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Alexis Renard
I've handled quite a few Article 9 priority disputes over the years, and unfortunately the outcome here seems pretty clear-cut. The first-to-file rule under UCC 9-322(a)(1) is going to control since you're both dealing with the same type of collateral perfected by filing. Your March 15th security agreement gave you attachment, but perfection didn't occur until your March 22nd filing - and that's what matters for priority. However, don't give up entirely yet. I'd strongly recommend doing a forensic review of their UCC-1 filing. Look for any errors in the debtor name (even minor variations can be fatal), collateral description issues, or other filing defects. Also verify that their security agreement was actually signed before their filing date. Sometimes lenders file first and backdate documents, which can create vulnerabilities. Given the $850K at stake, it's worth investing in a thorough analysis before conceding priority.
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