UCC 9-315 proceeds tracking after equipment sale - lien still valid?

This is correct but there's a timing element too. If the proceeds are cash or deposit accounts, you have automatic perfection for only 20 days under 9-315(d). After that you might need to take additional steps depending on how the proceeds are held.

Wait, so there's a 20-day window? The sale happened about 35 days ago. Does that mean we lost our perfected status in the proceeds?

Actually ran into this exact scenario last year. Our loan officer didn't realize the 20-day clock was ticking on cash proceeds. Had to scramble to perfect in the deposit account directly. Really stressful situation.

This is why I always include 'and all proceeds thereof' language in UCC-1 collateral descriptions. Doesn't change the automatic continuation but makes it crystal clear to everyone involved.

Interesting, never heard of that tool. Does it actually analyze the UCC 9-315 proceeds rules or just check the collateral language?

It checks document consistency and flags potential issues with collateral descriptions. Really helpful for catching things like proceeds coverage before they become problems. Just upload PDFs and it cross-references everything.

Honestly sounds too good to be true but if it works for UCC analysis might be worth trying. These proceeds rules are confusing enough without missing paperwork details.

This is the key point everyone's dancing around. The automatic perfection lapses but you can still perfect manually. Not ideal but not a total loss either.

But what if the proceeds got mixed with other funds in the operating account? Doesn't that complicate the identifiable proceeds requirement?

Commingling can be an issue but if you can trace the $180k into the account and show it's still there (or what portion remains), you may still have rights to that identifiable portion.

That's brutal. Did you end up taking a loss or were you able to recover through other means?

Borrower eventually paid but it was touch and go for months. Could have been avoided if we'd known about the automatic perfection timeline.

Good point about state variations. Though most states follow the uniform version pretty closely on proceeds rules.

Still worth checking the state UCC database to see exactly what version they've adopted.

It was a sale of the manufacturing equipment, not inventory. Borrower was downsizing operations so they sold some of their stamping presses.

OK so not ordinary course then. That means your security interest should definitely continue in the proceeds under 9-315(a)(2).

Ordinary course sales are where you might lose your security interest entirely, so this is actually better for the lender's position.

How does it handle the timing issues though? Like the 20-day rule for cash proceeds perfection?

It flags potential issues with document consistency and collateral descriptions. For timing rules you'd still need to track dates yourself, but it helps ensure your paperwork is solid.

Agree completely. The automatic continuation in proceeds is one of the stronger protections in Article 9.

Just don't wait any longer to perfect in the actual deposit account where the proceeds are sitting.

Will do - meeting with our legal team tomorrow to map out next steps for perfecting in the deposit account.

Hope it works out. These proceeds rules really need better documentation in the statute itself.