UCC 9 317 Priority Rules - Lost Security Interest After Equipment Moved?

UCC 9-317 is about purchase money security interests and buyers in ordinary course, but you're dealing with a relocation issue which falls under different sections. The key question is whether your original filing remained effective in the new state. Generally, you have a 4-month grace period after collateral moves to a new state to file there, but 8 months means you likely lost perfection unless there are other factors.

We had something similar happen with construction equipment that got moved between job sites. The 4-month rule is strict - UCC 9-316 gives you that window to re-file, but after that you're unperfected retroactively. Did you guys have any language in your security agreement about notification requirements for moving collateral?

Wait, are we sure about the 4-month rule here? I thought equipment that moves temporarily doesn't lose perfection as long as it returns to the original state within a reasonable time. 8 months seems long but if it was truly temporary...

This is exactly why we always file protective UCC-1s in neighboring states for mobile equipment. Costs a few hundred bucks but way cheaper than losing priority on a six-figure loan. Your best bet now might be negotiating with the other lender or seeing if there are any defects in their filing.

UGH this stuff makes my head spin. Why can't there just be a national UCC registry instead of dealing with 50 different state systems? Sorry, not helpful to your situation but I feel your pain.

Have you considered whether the equipment was actually 'located' in the new state for UCC purposes? Sometimes equipment that's temporarily deployed but controlled from the original state might still be considered located there. Worth checking the specific facts.

Been doing secured transactions for 15 years and I've seen lenders lose millions over these multi-state issues. The key is having systems in place to track collateral movement. For existing situations like yours, focus on: 1) Exact timing of the move, 2) Any defects in the competing filing, 3) Whether debtor breached any agreement terms.

Probably a long shot, but did the debtor file any amendments or changes to their business registration around the time of the move? Sometimes corporate changes can affect the effectiveness of UCC filings.

This situation sucks but it's a good reminder to always include specific language about multi-state equipment and notification requirements in security agreements. We learned this lesson the hard way too.

Long term, you might want to look into UCC monitoring services that track your filings and alert you to potential issues. Short term, focus on finding any technical defects in the competing lender's filing - that's probably your best shot at this point.

This is a tough situation but unfortunately pretty common with mobile equipment financing. The 4-month rule under UCC 9-316 is strict - once your perfection lapsed after month 4, the competing lender who filed in month 6 would have priority even though your security interest was created first. Your main options now are: 1) Scrutinize their UCC-1 filing for any technical defects (debtor name errors, insufficient collateral description, etc.), 2) Review whether the equipment was truly "located" in the new state vs. just temporarily deployed there, and 3) Pursue the debtor for breach of your security agreement terms. The notification language in your agreement might not help with priority but could give you damages against the debtor. Going forward, definitely consider protective filings in adjacent states for mobile equipment - much cheaper than losing a six-figure loan to a priority dispute.