UCC 9-102 a 65 Definition Causing Filing Confusion - Need Help Understanding

The rejection said our collateral description was 'insufficient to identify proceeds with reasonable certainty.' We just wrote 'all equipment and proceeds thereof' but apparently that wasn't specific enough.

Yeah that description is way too generic. You need to be more specific about what equipment and what types of proceeds you're claiming.

That's helpful - did you have any issues with the filing after adding that language?

Nope, went through clean after I revised it. The key is being specific enough that someone reading the filing understands what you're claiming as proceeds.

This is why I always triple-check my collateral descriptions before filing. One word can make the difference between acceptance and rejection.

Never heard of that service but sounds useful. Does it specifically check 9-102 compliance?

Yeah it checks various UCC compliance issues including collateral descriptions. Really helped me avoid the back-and-forth with the SOS office.

Might have to look into that myself. I'm tired of getting rejections for stupid formatting mistakes.

The UCC automatically covers proceeds under 9-315, but your collateral description still needs to be sufficient to put third parties on notice of what you're claiming.

Right, the automatic perfection only lasts 20 days unless you file to cover the proceeds specifically.

I mean, they have to follow the law. A vague description doesn't give proper notice to other creditors.

Sure but some consistency would be nice. Different states seem to have totally different standards.

That's why you have to know your state's specific requirements. What works in Delaware might not work in California.

That's a good approach - I was trying to list everything specifically but referencing the security agreement might be cleaner.

Just make sure your security agreement is detailed enough to support that reference. The UCC-1 and security agreement need to work together.

No, 9-102(a)(65) is correct for the proceeds definition. You might be thinking of 9-315 which covers the perfection of security interests in proceeds.

You're right, I was confusing the sections. Thanks for the clarification.

Easy mistake to make - there are so many cross-references in Article 9.

You don't need to cite the UCC section in your filing. You just need to describe the collateral clearly enough to comply with the requirements.

If you're worried, you could always file a UCC-3 amendment to clarify your collateral description.

Any tips for describing proceeds in equipment deals specifically?

For equipment, I typically include 'insurance and condemnation proceeds, rental proceeds, sale proceeds, and any other proceeds as defined in UCC 9-102(a)(65)' to cover all the bases.

How accurate is the checking? I'm always skeptical of automated tools for legal documents.

It's been spot-on for UCC compliance issues. Obviously you still want to review everything yourself, but it catches the common mistakes that cause rejections.

Glad it worked out! Always nice to hear a success story.

That's awesome. Hopefully this thread helps other people with the same issue.

Great to see the revision worked. The proceeds definition can be tricky but once you get the language right it's usually smooth sailing.