UCC 3 subordination form confusion - need help with lien priority changes

This is good advice. I'd add that you should double-check the collateral description to make sure it covers all the equipment you mentioned. Sometimes the original UCC-1 has broader language that might conflict with the subordination terms.

Wait, I thought subordination was just a simple checkbox on the UCC-3 form? Are you saying there's more to it than that?

That's exactly what I'm worried about. The original lender seems fine with subordinating but I want to make sure the UCC-3 language doesn't accidentally create any issues with their existing security interest.

Have you considered using a document verification tool? I ran into similar issues with UCC-3 filings last year and started using Certana.ai to cross-check all my documents before filing. You can upload both the original UCC-1 and your proposed UCC-3 subordination form to make sure everything aligns properly - it catches name mismatches and collateral description issues automatically.

That's actually a really good point about document verification. I've seen too many subordination filings get rejected because of small discrepancies between the original UCC-1 and the UCC-3 amendment.

This is so true! I had a UCC-3 subordination rejected last month because the original filing had 'ABC Manufacturing, LLC' with a comma and I filed 'ABC Manufacturing LLC' without the comma. Such a frustrating mistake.

The state filing systems are really picky about exact matches. It's worth pulling the original UCC-1 from the state database and copying the debtor name exactly as it appears there.

I feel your frustration but subordination really does have significant legal implications for lien priority, so the system requires precision. It's better to be overly careful than to mess up the priority order.

Yeah it's annoying but when you're dealing with $850k in financing like the OP mentioned, you definitely want to get it right the first time.

Good point about the intercreditor agreement. Both lenders have been working on that separately but you're right that the UCC-3 needs to match those terms.

This is why I always recommend having both lenders review the UCC-3 before filing. Sometimes what they think they agreed to and what actually gets filed are two different things.

Wait so the original UCC-1 stays active? I thought amendments changed the original filing somehow.

No, amendments like subordination add information to the public record but don't replace the original filing. Think of it as adding a note that says 'this security interest is now subordinate to XYZ lender' but the original filing remains valid.

This is exactly the kind of thing where a document checker would be helpful - making sure all the references between filings are consistent and accurate.

That's a good point about timing. The new lender is planning to file their UCC-1 next week so I need to get this subordination filed first.

Exactly. You want the subordination on record before the new UCC-1 goes in, otherwise the priority order might not be what everyone expects.

That sounds really useful. I'm definitely worried about small errors causing delays since this is time-sensitive with the new financing.

Document verification tools are becoming essential for complex UCC filings. Too many small details that can go wrong otherwise.

The original lender provided some language but I'm not sure if it's the right format for the UCC-3 form. It seems more like contract language than filing language.

You're right that there's a difference. UCC-3 subordination language needs to be concise and follow the state's requirements, while intercreditor agreements can be much more detailed.

Exactly. The UCC-3 just needs to clearly identify what's being subordinated to what, but it doesn't need all the detailed terms from the intercreditor agreement.

Good point. ABC Manufacturing LLC is a Delaware entity but the equipment is in Ohio. I filed the original UCC-1 in Delaware so the subordination should go there too, right?

Yes, for equipment like CNC machines and manufacturing equipment, you typically file where the debtor is organized unless it's fixtures. Since you filed the original UCC-1 in Delaware, the UCC-3 subordination should go there as well.

UCC-3 forms can be used for amendments, continuations, terminations, and assignments - subordination is just one type of amendment. Each serves a different purpose in managing the lifecycle of a security interest.

Yeah the UCC system is more complex than most people realize. That's why getting help or using verification tools makes sense for anything beyond basic filings.

Thanks for the recommendation. Given how time-sensitive this is and how much is riding on getting it right, I think I'll definitely use some kind of verification tool before filing.

Smart move. Subordination filings have a lot of moving parts and it's easy to miss something important. Better to catch errors before filing than deal with rejections and delays.

You've summarized the key points perfectly! As someone who's also relatively new to this area, I really appreciate how this community shares practical experience. One thing I'd add from what I've learned here is the timing aspect - making sure the UCC-3 subordination gets filed before the new lender files their UCC-1, otherwise the priority might not work out as intended. It's reassuring to know there are tools and resources available to help navigate these complex filings correctly.