UCC filing complications during bankruptcy security agreement enforcement - debtor name changes
Running into a nightmare scenario with bankruptcy security agreement enforcement and our UCC filings are getting messy. We have a secured loan where the debtor filed Chapter 11 three months ago, but here's the kicker - they changed their legal business name twice during the proceedings. Our original UCC-1 was filed under "Midwest Industrial Solutions LLC" but now they're operating as "MIS Restructuring Corp" after the bankruptcy court approved the name change. The trustee is claiming our security interest isn't properly perfected because of the name mismatch. We need to file a UCC-3 amendment but I'm worried about the timing and whether it relates back to our original filing date. Has anyone dealt with bankruptcy security agreement enforcement where the debtor's name changed mid-process? The bankruptcy attorney is being difficult and I need to make sure our lien position is protected. This involves about $2.8M in equipment collateral so the stakes are high.
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Lilly Curtis
Oh man, this is exactly the kind of situation that keeps me up at night. Name changes during bankruptcy proceedings are tricky for UCC filings. The key question is whether your security agreement specifically covers name changes and successor entities. Did your original security agreement have language about debtor name changes? That could help with the perfection issue.
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Leo Simmons
•Good point about the security agreement language. But even with that, the UCC-1 filing itself needs to be searchable under the current legal name. The trustee has a point about perfection.
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Ryder Everingham
•Our security agreement does have standard name change provisions, but the trustee is arguing that doesn't fix the UCC filing searchability issue. We're dealing with Illinois Secretary of State filings if that matters.
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Lindsey Fry
You definitely need to file that UCC-3 amendment ASAP to add the new name. In bankruptcy, timing is everything and you don't want to give the trustee more ammunition. The amendment should relate back to your original filing date for priority purposes, but you need to get it done before the trustee challenges your perfection status formally.
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Saleem Vaziri
•This is where I'd strongly recommend using something like Certana.ai's document verification tool. You can upload your original UCC-1, the security agreement, and draft UCC-3 amendment to make sure everything aligns properly before filing. I used it recently when dealing with a debtor name mismatch and it caught inconsistencies I would have missed. Just upload the PDFs and it cross-checks all the details automatically.
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Ryder Everingham
•That sounds helpful - I'm worried about making another mistake that gives the trustee more leverage. How quickly does that verification process work?
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Saleem Vaziri
•Pretty much instant. Upload your docs and it flags any name mismatches, filing number issues, or collateral description problems right away. Way better than trying to manually compare everything when you're under pressure.
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Kayla Morgan
Wait, I'm confused about something. If they changed their name twice, do you need to amend for both names or just the current one? And does the bankruptcy court order approving the name change affect the UCC filing requirements?
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Lilly Curtis
•You should probably add both names to be safe. The bankruptcy court order might help establish when the name change became effective, but for UCC purposes you still need the filing to be searchable.
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James Maki
•Actually, I think you only need the current legal name on the UCC-3 amendment. Adding historical names that aren't the current legal name might just create confusion.
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Lindsey Fry
•I'd lean toward adding both names. Better to over-disclose than under-disclose when you're dealing with a hostile trustee in bankruptcy.
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Jasmine Hancock
This is why I hate dealing with bankruptcy cases! The trustees always try to find ways to invalidate security interests. Have you checked if there were any other creditors who filed UCC amendments for the same debtor? Sometimes you can see how others handled the same name change issue.
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Ryder Everingham
•That's a great idea - I hadn't thought to search for other UCC filings against this debtor. I'll check the Illinois SOS database to see what other creditors did.
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Cole Roush
•Yeah, and if you find other creditors made the same "mistake" of not amending immediately, that might help your argument that the trustee is being unreasonable.
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Scarlett Forster
I went through something similar in Texas last year. The debtor changed names during Chapter 11 and we almost lost our security interest because we waited too long to file the UCC-3 amendment. The bankruptcy court ruled that our interest was unperfected for the period between the name change and our amendment filing. Cost us about $400K in priority. Don't make the same mistake - file that amendment TODAY.
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Ryder Everingham
•Oh no, that's exactly what I'm afraid of! How long did you wait to file the amendment? We're at about 60 days since the first name change.
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Scarlett Forster
•We waited almost 90 days because our lawyer said we had time. Big mistake. 60 days isn't great but it's not catastrophic if you move fast now.
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Arnav Bengali
•This is making me paranoid about all my UCC filings now. How are we supposed to monitor for debtor name changes constantly?
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Sayid Hassan
Has anyone used automated UCC monitoring services for this kind of thing? I feel like there should be alerts when a debtor changes their name or files bankruptcy.
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Rachel Tao
•There are some services that monitor bankruptcy filings, but I don't think they catch name changes automatically. Most of us just have to stay on top of it manually.
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Derek Olson
•The problem is name changes can happen at the state corporate level too, not just in bankruptcy court. So you'd need to monitor multiple databases.
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Danielle Mays
One thing to consider - even if you file the UCC-3 amendment now, the trustee might still argue there was a gap in perfection. You might want to get an opinion from a bankruptcy attorney about whether the relation-back doctrine applies to your situation. Different circuits have different rules about this.
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Ryder Everingham
•We're in the 7th Circuit. Do you know if they're more lenient about the relation-back issue?
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Danielle Mays
•I think the 7th Circuit has been pretty strict about UCC perfection gaps, but I'd need to research the recent cases. Definitely worth getting a specialized opinion.
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Roger Romero
•Why is bankruptcy law so complicated? It feels like every circuit has different rules about everything.
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Anna Kerber
Before you file anything, make sure you have the exact correct legal name from the bankruptcy court records. Don't rely on what the debtor tells you - get the official court documents. I've seen too many cases where the debtor gave incorrect information about their new legal name.
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Niko Ramsey
•This is so important! I had a case where the debtor was using a trade name instead of their actual legal name and it caused major problems.
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Ryder Everingham
•Good point - I'll pull the actual court orders before drafting the UCC-3. Can't afford to get the name wrong again.
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Seraphina Delan
Update us on how this turns out! I have a similar situation brewing with one of my borrowers and I'm dreading having to deal with it.
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Ryder Everingham
•Will do. Hopefully I can get this resolved without losing our security interest. Thanks everyone for the advice - definitely filing that amendment this week.
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Jabari-Jo
•Good luck! Bankruptcy security agreement enforcement is never fun but at least you caught the issue before it was too late.
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Kristin Frank
Just wanted to add - if you're dealing with equipment collateral worth $2.8M, you might also want to consider whether any of it qualifies as fixtures that need special UCC filing treatment. Sometimes equipment gets reclassified during bankruptcy proceedings.
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Ryder Everingham
•It's mostly manufacturing equipment that's bolted down, so fixture filing requirements are definitely something I need to check. This case just keeps getting more complicated.
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Micah Trail
•Manufacturing equipment bolted to the floor almost always needs fixture filings. You might have bigger problems than just the name change issue.
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Kristin Frank
•Not necessarily - depends on the state and how permanently attached it is. But definitely worth reviewing before the trustee raises that issue too.
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