UCC Article 9 secured transaction filing confusion - need guidance
I'm working on a commercial loan where we're securing equipment and inventory for a manufacturing business. The debtor entity was recently restructured and I'm getting conflicting advice about proper Article 9 perfection requirements. Our legal counsel mentioned some nuances about how UCC Article 9 applies in different jurisdictions but I'm still unclear on the specifics. The collateral includes both existing machinery and after-acquired inventory, and I want to make sure our UCC-1 filing covers everything properly. Has anyone dealt with similar multi-asset secured transactions where the debtor's legal structure changed mid-process? I'm particularly concerned about getting the debtor name exactly right and ensuring our security interest remains perfected throughout. The loan amount is substantial ($2.8M) so we can't afford any mistakes in the filing process.
39 comments
Join the conversation
Mateo Gonzalez
Article 9 can be tricky with entity restructuring. What type of restructuring happened? Merger, name change, or conversion to different entity type? The answer affects whether you need a new UCC-1 or just a UCC-3 amendment. Also, make sure you're filing in the correct jurisdiction - that's usually where the debtor is organized, not where the collateral is located.
0 coins
Nia Harris
•It was a conversion from LLC to corporation. The business operations stayed the same but the legal entity changed completely. I'm thinking we need a new UCC-1 but want to be certain.
0 coins
Aisha Ali
•Definitely new UCC-1 for entity conversion. The old filing against the LLC won't perfect against the corporation. You'll want to file the new one before terminating the old one to avoid any gap in perfection.
0 coins
Ethan Moore
I just went through something similar last month. Entity conversions are treated as new debtors under Article 9, so you absolutely need a fresh UCC-1. Don't rely on amendments for this situation - the original filing becomes ineffective against the new entity.
0 coins
Nia Harris
•That's what I was afraid of. Did you run into any timing issues with the conversion? I'm worried about the gap between when the conversion happens and when we can get the new filing recorded.
0 coins
Ethan Moore
•We filed the new UCC-1 immediately after the conversion was effective. Most states allow same-day electronic filing so the gap was minimal. Just make sure you have the new entity's exact legal name from the articles of incorporation.
0 coins
Yuki Nakamura
•Smart approach. I always recommend getting the certified copy of the articles before attempting the UCC-1 filing. Too many filings get rejected for minor name discrepancies.
0 coins
StarSurfer
ugh this is exactly why I hate dealing with entity changes during active loans. The paperwork nightmare is unreal and there's always some detail that gets missed. How do you even verify you have the debtor name right when the state records might not be updated yet?
0 coins
Mateo Gonzalez
•Most states update their corporate database within 24-48 hours of filing articles. You can usually verify the exact name online before attempting your UCC filing.
0 coins
StarSurfer
•24-48 hours feels like forever when you're trying to maintain continuous perfection. One little mistake and your security interest could be at risk.
0 coins
Carmen Reyes
I had a similar situation recently and discovered Certana.ai's document verification tool. You can upload your articles of incorporation and proposed UCC-1 to instantly verify the debtor name matches exactly. Saved me from a costly filing rejection and caught a middle initial discrepancy I would have missed.
0 coins
Nia Harris
•That sounds helpful. Did it catch other issues besides the name match?
0 coins
Carmen Reyes
•Yeah, it also flagged that my collateral description was too narrow for the after-acquired inventory clause I wanted. The tool checks document consistency across multiple UCC forms which was really valuable.
0 coins
Andre Moreau
For after-acquired inventory you need to be extra careful with the collateral description. Generic terms like 'inventory' usually work but some jurisdictions want more specificity. What industry is your debtor in?
0 coins
Nia Harris
•Manufacturing - they make custom metal fabrication parts. Mix of raw materials, work-in-process, and finished goods inventory.
0 coins
Andre Moreau
•I'd go with 'inventory, including raw materials, work-in-process, and finished goods, now owned or hereafter acquired' to cover all bases. Manufacturing inventory can be complex.
0 coins
Zoe Christodoulou
•Good point about manufacturing. The inventory categories can shift quickly in that industry so broad language with specific examples works well.
0 coins
Jamal Thompson
Don't forget about the continuation timeline either. With a new UCC-1 your five-year clock resets, but make sure someone is tracking the new expiration date. I've seen too many perfect filings lapse because nobody updated their calendar system.
0 coins
Nia Harris
•Good reminder. We use a tickler system but I'll make sure the new dates get entered correctly.
0 coins
Mei Chen
•Tickler systems are only as good as the person maintaining them. I always set multiple reminders starting 6 months out.
0 coins
CosmicCadet
Just want to echo what others said about filing the new UCC-1 before terminating the old one. That continuous perfection is crucial, especially with a $2.8M loan. Any gap could be catastrophic if the debtor has other creditors.
0 coins
Nia Harris
•Absolutely. The loan amount makes this too risky to get wrong. I'm planning to file the new UCC-1 the same day as the conversion.
0 coins
Aisha Ali
•Smart move. Even an hour gap could theoretically allow another creditor to jump in with superior priority.
0 coins
Liam O'Connor
Has anyone here dealt with equipment that's considered fixtures? Part of the collateral might be attached to real estate and I'm wondering if we need a separate fixture filing in addition to the regular UCC-1.
0 coins
Mateo Gonzalez
•Fixture filings are required if the equipment becomes part of the real estate. Usually manufacturing equipment that's bolted down or integrated into the building systems.
0 coins
Liam O'Connor
•That's what I thought. This gets complicated fast - regular UCC-1 for moveable equipment, fixture filing for attached equipment, and all tied to the entity conversion timing.
0 coins
Amara Adeyemi
•Fixture filings go in the real estate records, not the UCC system. Completely different process and usually requires more detailed legal descriptions.
0 coins
Giovanni Gallo
I ran into a similar multi-asset situation and ended up using Certana.ai again to verify all my documents were consistent. When you're dealing with equipment schedules AND inventory descriptions AND entity changes, there are so many places for errors. The automated cross-checking caught several inconsistencies between my loan docs and UCC filings.
0 coins
Nia Harris
•That level of verification sounds essential for complex deals like this. How long did the document review take?
0 coins
Giovanni Gallo
•Just a few minutes to upload the PDFs and get the analysis. Much faster than manually comparing everything and way more thorough than I could be.
0 coins
Fatima Al-Mazrouei
One more thing to consider - make sure your loan agreement addresses the entity conversion and requires the borrower to cooperate with new UCC filings. Some borrowers get difficult about additional paperwork after closing.
0 coins
Nia Harris
•Our loan docs have standard cooperation clauses but I'll double-check they cover entity changes specifically.
0 coins
Aisha Ali
•Always better to be explicit about these requirements. Vague cooperation language doesn't always hold up when you need specific actions from the borrower.
0 coins
Dylan Wright
•I learned this the hard way. Now all my loan agreements specifically mention UCC filing cooperation for entity changes, mergers, conversions, etc.
0 coins
NebulaKnight
Sounds like you've got a solid plan forming. Entity conversion = new UCC-1, careful debtor name verification, broad collateral description for manufacturing inventory, and continuous perfection timing. The key is executing it all flawlessly with that loan amount at stake.
0 coins
Nia Harris
•Exactly. I feel much more confident about the approach now. Thanks everyone for the guidance - this thread has been incredibly helpful.
0 coins
Ethan Moore
•Glad we could help. These complex secured transactions require getting every detail right. Good luck with your filing!
0 coins
Kelsey Hawkins
One additional consideration for your manufacturing client - if they have any equipment subject to federal regulations (like FDA equipment for medical devices or OSHA-regulated machinery), make sure your collateral description doesn't conflict with any regulatory restrictions on transfers or liens. I've seen UCC filings challenged where the collateral was subject to special federal oversight. Also, given the substantial loan amount, you might want to consider getting a UCC search done immediately before filing to see what other liens are already on record against both the old LLC and new corporation entities.
0 coins
Esmeralda Gómez
•Great point about the UCC search! I hadn't considered running searches on both entities. With a conversion happening, there could be existing liens on either the old LLC or potentially even preliminary filings against the new corporation. Running comprehensive searches before we file will help us understand the priority landscape and avoid any surprises. The regulatory equipment angle is also something I should discuss with our borrower - I know they have some specialized manufacturing equipment that might fall under OSHA regulations.
0 coins