UCC 1-308 Anderson Version - Filing Strategy Question

Exactly right. The UCC-1 filing itself is just notice - the security agreement governs the actual rights. Adding reservation language to the financing statement won't change the underlying obligation.

But shouldn't we be concerned if the SOS rejects a filing with non-standard language? I had a UCC-1 kicked back last month just for including too much detail in the collateral description.

Yeah, I was thinking the same thing. A lot of these alternative legal theories don't hold up when you actually need to enforce the security interest.

That's what I was worried about. The borrower's attorney seems legitimate though, not some sovereign citizen type situation. But maybe they're just accommodating their client's requests.

Even legitimate attorneys sometimes have to work with clients who have... interesting ideas about UCC law. I'd focus on what protects your lien position.

That's actually a great idea - I should verify everything is consistent regardless of what language we end up including. Does it catch debtor name variations too?

Yes, it cross-references exact name matches between your charter documents and UCC filings. Saved me from a potential disaster when the borrower's legal name was slightly different on their articles of incorporation.

Harsh but probably accurate. I've seen too many deals get complicated by borrowers who think they found some secret loophole in commercial law.

But we still have to maintain the relationship with the borrower. Sometimes you have to find middle ground even when their legal theories are questionable.

Middle ground is fine as long as it doesn't compromise your lien. File the UCC properly first, negotiate language second.

They want something about 'without prejudice' and 'under protest' in the additional information section. Seems like it would just confuse the filing office.

Yeah, that's not going to fly with most Secretary of State offices. The additional information section is for things like fixture filing indicators, not legal disclaimers.

Our state specifically prohibits extraneous language in UCC filings. You might want to check your local filing office rules before attempting this.

Agreed. When in doubt, follow the standard procedures that have been tested in court. Innovation in UCC filings is usually not a good thing.

This is reassuring. I was starting to think I was missing some major development in secured transaction practice.

That's a clever compromise. Did you reference the memorandum in the UCC filing or keep it completely separate?

Kept it completely separate. The UCC-1 should stand on its own for perfection purposes. The memorandum was just for client relationship management.

This is smart business practice. Keep the legal requirements clean but accommodate client concerns where possible.

Good point. We're not under time pressure right now but I don't want to create unnecessary delays either.

Exactly. I've seen security interests go unperfected because people got cute with the filings. Better to have boring and effective than creative and useless.

That's actually a great question. The extra research time is definitely adding to the transaction costs.

If they want non-standard approaches, they should pay for non-standard legal work. Don't absorb that cost just to accommodate questionable legal theories.

This is why I always scope out potential complications in the fee agreement upfront. Unusual client requests = additional billable hours.

Will do. I'm leaning toward the separate memorandum approach - keeps everyone happy without compromising the filing.

Smart choice. Document the compromise in your file notes too, in case questions come up later during enforcement or continuation.

Welcome to the community Sarah! You're asking great questions. From what I've seen in practice, courts generally don't give much weight to conditional acceptance language when it comes to enforcing security interests. The UCC is pretty clear about what creates and perfects a security interest, and borrower reservations typically don't override those fundamental requirements. Daniel's situation is actually more common than you might think - borrowers often come across alternative legal theories online and want to incorporate them into standard commercial transactions. The key is distinguishing between what makes clients feel better and what actually protects your legal position.

Thanks for the warm welcome Carter! That makes a lot of sense about courts not giving weight to conditional acceptance language. I'm curious though - from a practical standpoint, how do you typically handle the client education piece when borrowers are convinced they've found some legal loophole? I imagine it can be delicate to explain why their "research" might not be as solid as they think, especially when they're paying substantial legal fees for the transaction. Do you find that providing specific case citations helps, or do clients sometimes dig in deeper when you challenge their theories?