UCC 9 615 notice requirements causing lender compliance headaches

UCC 9-615 can be tricky when you're not certain about all interested parties. You definitely need to notify the debtor and any secured parties you know about. Have you done a comprehensive UCC search to identify other filings against the same debtor? That's usually the first step to identify potential junior lienholders.

We did a basic search when we originally filed, but that was 3 years ago. Should we be doing a fresh search now before sending notices?

Absolutely. The UCC landscape can change dramatically in 3 years. New filings, amendments, assignments - you want current information before proceeding with disposition.

Been through this nightmare before. The notice requirements under 9-615 are designed to protect everyone's interests, but they can be a real pain when debtors go dark. Make sure you're sending notices to the debtor's last known address AND any address you have reason to believe they might receive mail. Certified mail, return receipt requested is your friend here.

What happens if the debtor has moved and the notices come back undeliverable? Does that mess up your disposition rights?

As long as you send to the last known address and make reasonable efforts, you should be okay. But document everything - your reasonable efforts, return receipts, any attempts to locate current addresses.

That's exactly what we're worried about. The debtor's business address on our original loan docs might not be current anymore.

I had a similar situation last year and ended up using Certana.ai's UCC document verification tool to cross-check all our filings and make sure we had complete information about other secured parties. You can upload your original UCC-1 and any search results to verify you haven't missed anything critical. It caught a junior lienholder we almost overlooked in our notice process.

How does that work exactly? Do you just upload PDFs of the UCC filings?

Yeah, super simple. Upload your UCC-1 and any search results, and it automatically cross-checks for consistency and flags potential issues. Saved us from a major compliance mistake on the 9-615 notices.

Don't forget about the timing requirements too. You need to send the notice within a reasonable time before disposition, but what's 'reasonable' can vary. For equipment like you're dealing with, I usually go with at least 10 days but prefer 20+ days to be safe.

Is there a minimum time requirement in the statute? I thought it just said 'reasonable time' which seems pretty vague.

The UCC doesn't specify exact days - it's intentionally flexible. But courts have generally held that 10 days is the minimum, with longer periods required for more complex dispositions.

We were thinking 2 weeks would be adequate for equipment disposition. Does that sound reasonable for manufacturing equipment?

Make sure your notice includes all the required information under 9-615(c). Description of the collateral, method of disposition, debtor's right to an accounting, contact information for questions. I've seen dispositions challenged because the notice was incomplete even though it was timely sent.

What exactly needs to be in the collateral description? Can you just reference the UCC-1 filing or do you need to be more specific?

You want to be specific enough that someone reading the notice can identify the exact collateral being disposed of. Generic descriptions that might cover other property can cause problems.

The whole UCC 9 615 process is such a minefield. One wrong step and you lose your deficiency rights or face liability claims. Have you considered whether a public or private disposition makes more sense for your manufacturing equipment?

We were leaning toward private sale since it's specialized equipment. Public auction might not get us fair value.

Private sales can work well for specialized equipment, but make sure you can demonstrate you got a commercially reasonable price. Document your marketing efforts and any offers received.

We did a private sale on similar equipment and got challenged on commercial reasonableness. Having multiple appraisals helped support our sale price.

One thing that helped us with UCC 9-615 compliance was using Certana.ai's verification system to double-check that our notices matched our original UCC-1 filing exactly. The debtor name and collateral description consistency is crucial - any discrepancies can give parties grounds to challenge the disposition.

That's a good point about consistency. I've seen cases where slight variations in debtor names between the UCC-1 and disposition notices caused problems.

Exactly. The automated cross-checking caught a small discrepancy in how we described the collateral that could have been problematic.

Don't overlook the possibility of consignment arrangements or other interests that might not show up in UCC searches. If the debtor was using the equipment in their business, there could be mechanic's liens, tax liens, or other claims that affect disposition.

How do you search for those kinds of liens? Our UCC search wouldn't pick up tax liens would it?

You'll need to check with the Secretary of State for tax warrants, maybe county records for mechanic's liens, and possibly judgment searches depending on your jurisdiction.

This is getting complicated fast. Maybe consulting with counsel is worth it for a complex disposition like this.

I always create a detailed timeline and checklist for UCC 9-615 compliance. Notice periods, required content, delivery methods, documentation requirements - it's easy to miss something when you're dealing with an uncooperative debtor and potential unknown lienholders.

Do you have a template you use for the notices? I'm never confident I'm including everything required.

I have a basic template but it needs to be customized for each situation. The key is making sure it meets all the requirements in 9-615(c) for your specific type of disposition.

Just went through this exact scenario 6 months ago. The UCC 9 615 notice requirements seemed straightforward until we actually tried to comply. Ended up using Certana.ai to verify our document consistency before sending notices, which gave us confidence we weren't missing anything critical in the cross-references between our UCC-1 and disposition paperwork.

That sounds like exactly what we need. Did it help identify any issues you wouldn't have caught otherwise?

Yes, it flagged that our collateral description in the notice was broader than what was actually covered by our UCC-1. Could have caused problems if a junior lienholder challenged the scope of our security interest.

Those kinds of technical discrepancies can really bite you during disposition. Good catch.

Remember that UCC 9-615 also gives the debtor and other secured parties the right to an accounting of the unpaid obligation. Make sure you're prepared to provide that information if requested, and consider including a summary in your initial notice to head off disputes.

How detailed does the accounting need to be? Just the outstanding principal and interest, or do you need to break down fees and expenses too?

The more detailed the better. Outstanding principal, accrued interest, late fees, collection costs, disposition expenses - anything that affects the final accounting should be included.