UCC Notice of Sale Requirements - Default Timeline Confusion

This is exactly right about the notice timeline. I'd also add that you need to send notice to any party who has filed a UCC-1 against the same debtor if they've notified you of their interest. The notice should include the time, place, and manner of the sale.

Wait, doesn't the notice requirement also depend on whether the debtor is an individual or business entity? I thought consumer transactions had different rules.

That's a good point about doing the UCC search. How recent does the search need to be before the sale? I assume you can't rely on a search that's months old.

I usually do the search within 30 days of sending the notices, just to be safe. Things can change quickly with UCC filings and you don't want to miss anyone.

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

Yeah, it's pretty straightforward. You upload the PDFs and it automatically checks for consistency between documents - debtor names, filing numbers, collateral descriptions. Takes the guesswork out of whether everything aligns properly.

That sounds useful, especially for complex deals with multiple amendments. Manual document comparison is such a pain and easy to mess up.

Is there a standard form for UCC sale notices or does each lender create their own?

Most lenders have their own forms but they follow the same basic requirements under Article 9. Some states have suggested forms but they're not mandatory.

How specific does the collateral description need to be in the UCC-1? Can you use generic terms like 'all equipment' or do you need serial numbers?

For UCC-1 filings, you can use broader descriptions like 'all equipment' or 'all inventory.' The key is that it reasonably identifies the collateral. Serial numbers aren't required unless it's a fixture filing or consumer goods.

But for the sale notice itself, you probably want to be more specific about exactly what equipment is being sold, right? Bidders need to know what they're bidding on.

What's the difference between notice requirements for public vs private sales? I always get confused about this.

Public sales require notice of the specific time and place. Private sales just need reasonable notice that the sale will occur after a certain time. Private sales give you more flexibility but you need to make sure the sale is commercially reasonable.

Good reminder. How long should you keep these records after the sale?

I keep them for at least 4 years, which covers most statute of limitations periods for challenging the sale. Better safe than sorry when it comes to UCC compliance documentation.

Yes, we sent the default notice 30 days ago with a 15-day cure period. The borrower didn't respond so we're clear to proceed with the sale process. Just want to make sure we get the UCC notice requirements right.

Sounds like you're on the right track then. The UCC notice is separate from your default notice under the loan agreement, so you're dealing with two different sets of requirements.

That's a good point. Can debtors actually file UCC-3 terminations without the secured party's authorization?

They can file them, but unauthorized terminations are invalid. The problem is that they create confusion and can complicate your sale process even if they're not legally effective.

This is another area where having a document verification tool would be helpful - catching any inconsistencies or unauthorized filings before they become problems.

How do you determine if equipment qualifies as a fixture? Is it just based on whether it's bolted down?

It's more complex than that. Courts look at factors like the degree of attachment, whether it's specially adapted for the building, and the intent of the parties. When in doubt, treat it as a fixture filing to be safe.

Manufacturing equipment can definitely be tricky on the fixture issue. I usually err on the side of caution and check the real estate records too if there's any question about attachment.

This is really comprehensive advice. The business days vs calendar days distinction is something I hadn't considered - do you know if this varies by state or is it pretty consistent across jurisdictions? Also, when you mention documenting the sale process for commercial reasonableness, what specific documentation have you found most important when defending these sales later?

Great point about business vs calendar days - this definitely varies by jurisdiction and I've seen it trip up lenders before. In my experience, the most critical documentation for commercial reasonableness includes: (1) evidence of market research for selecting the auctioneer/sale method, (2) records of any appraisals or valuations obtained, (3) documentation of marketing efforts and where the sale was advertised, (4) copies of any bids received and reasons for acceptance/rejection, and (5) comparable sales data if available. I also always keep detailed notes about the condition of the collateral at the time of sale. The key is showing you made reasonable efforts to maximize the sale proceeds under the circumstances.

For specialized CNC machinery, you definitely want to cast a wide net with marketing to show commercial reasonableness. I'd recommend advertising in industry-specific publications like Modern Machine Shop, Manufacturing News, or CNC West if you're in that region. Online platforms like Machinery Trader, BidSpotter, and even EquipNet can reach specialized buyers. Since the buyer pool is limited, document your research showing you identified the key channels where CNC buyers actually look. I'd also suggest getting at least one independent appraisal from someone familiar with that specific type of manufacturing equipment - it helps establish baseline value and shows you did your homework. The fact that you've used the same auction house for years could actually work in your favor if you can document their track record with similar equipment sales.

One additional consideration for CNC machinery - these assets often have software licenses and proprietary tooling that may not transfer with the equipment sale. Make sure your sale notice clearly describes what's included and excluded to avoid post-sale disputes. I've seen buyers claim the sale was commercially unreasonable because they thought they were getting licensed software that wasn't actually transferable. Also, if any of the CNC equipment requires specialized installation or has environmental requirements (like three-phase power, climate control), mention this in your marketing materials. Buyers who understand the full scope of what they're purchasing are more likely to bid appropriately, which supports your commercial reasonableness argument.