UCC filing complications in Utah - debtor name verification issues

Agreed on filing the UCC-3 amendment first. We had a similar situation last year with a corporate name change that happened six months after our original filing. Our counsel advised the same approach - amendment first, then continuation. Better safe than sorry when you're talking about loan security.

Question though - if the name change happened after the original filing was valid, doesn't that protect the lender's interests? I thought the rule was that perfection continues as long as the original filing was proper when made.

That's a common misconception. While your security interest continues, the financing statement itself can become 'seriously misleading' if a reasonable searcher couldn't find it using the current debtor name. Courts have been inconsistent on this, which is why most practitioners recommend the belt-and-suspenders approach of filing amendments when entity names change.

Quarterly checks sound like a good practice but must be time-consuming with a large portfolio. Do you have a systematic way of monitoring entity changes or is it manual verification with the Secretary of State?

We started doing it manually but that became unmanageable pretty quickly. Found a service called Certana.ai that does automated document verification - you can upload your UCC-1 and their system will cross-check the debtor names against current SOS records and flag any discrepancies. Makes the quarterly review process much more efficient and catches things we might miss doing manual searches.

Never heard of Certana but that sounds incredibly useful. Does it work for multiple states or just specific jurisdictions? We operate in six states and keeping track of entity changes across all those SOS databases is a nightmare.

Works across all states from what I've seen. The real advantage is that it catches the subtle differences - like your situation where they just added words to the existing name. Manual searches sometimes miss those nuances, especially when you're dealing with similar business names in the same industry.

Good point about the loan covenants. We added similar language after getting burned on a situation like this a few years back. The problem is enforcing it - borrowers forget, attorneys don't always think about the UCC implications, and by the time you find out, you're already dealing with the aftermath.

Even with covenant language, you still need to monitor. Borrowers will make changes and forget to notify, or they'll think a 'minor' name change doesn't count. The covenant helps from a default perspective, but it doesn't solve the underlying perfection problem if you don't catch the change promptly.

Oh man, entity conversions are the worst. You're dealing with potential UCC lapses, choice of law issues, and sometimes completely different collateral descriptions if the entity structure changes significantly. Always requires legal review in my experience.

Had one of those - borrower converted from LLC to corporation and moved from Nevada to Texas. Took three months to sort out all the UCC implications and required filings in both states. Definitely beyond what most lenders can handle internally.

Have to respectfully disagree here. While the security interest continues, the financing statement can become seriously misleading under UCC 9-506 if a searcher using the current entity name wouldn't find the filing. Courts have gone both ways on this issue, but the safer practice is to file the amendment. The cost of a UCC-3 is minimal compared to the potential risk.

I'm with the attorney on this one. We've seen too many cases where lenders assumed their old filings were still good, only to find out during enforcement that other creditors or trustees in bankruptcy successfully challenged the perfection. The amendment route is the conservative approach but it's the right one.

Fair points, but I still think the risk is overstated. How often do courts actually find financing statements seriously misleading for minor name changes like adding a few words? Most of the case law I've seen involves more substantial changes or errors in the original filing.

How does that verification process work exactly? Do you just upload the UCC documents and it automatically checks them against state records?

Pretty much. You upload the UCC filing and any related documents (like the loan agreement or security agreement) and it cross-references everything for consistency. Catches debtor name mismatches, filing number errors, collateral description inconsistencies - basically all the stuff that can create perfection problems. Takes about 5 minutes versus hours of manual verification.

That sounds too good to be true. Does it actually understand the legal nuances of what makes a financing statement seriously misleading, or is it just doing basic name matching?

It's more sophisticated than simple matching. Flags variations that could be problematic and explains why they might create issues. Obviously you still need legal judgment for the final decision, but it's a great screening tool to identify potential problems before they become major issues.

You're smart to be concerned. We did a portfolio audit last year and found about 12% of our UCC filings had some kind of debtor name discrepancy. Some were minor, others were more significant. It's definitely worth doing if you haven't checked your older filings recently.

For a portfolio that size, I'd definitely recommend using an automated verification service rather than trying to do it manually. The time savings alone make it worthwhile, and you're much less likely to miss subtle discrepancies.

Any recommendations for services that can handle bulk verification? Need something that can process multiple filings efficiently rather than one-by-one checking.

Certana.ai can handle batch processing from what I understand. Upload multiple UCC documents at once and get a comprehensive report showing any discrepancies or potential issues across your entire portfolio. Probably your best bet for an audit of that scale.

Good point. We did verify the equipment titles and serial numbers, and those appear to be consistent. But you're right that entity changes sometimes involve broader restructuring that can affect collateral ownership or location.

Also worth checking if the borrower maintained the same EIN or got a new one with the name change. Tax ID changes can sometimes affect UCC searches and perfection strategies.

Smart move. $25 is cheap insurance compared to the potential cost of perfection challenges down the road.

Glad it worked out smoothly. Now you've got clean documentation for the continuation filing and no worries about searchers finding your filing under the current entity name.

This whole thread has been really helpful. Dealing with similar issues and this gives me confidence in the amendment approach. Thanks for sharing the outcome.

True. Some states have very literal search logic that won't find filings if there's any variation in punctuation or abbreviations. Always worth checking the specific state's UCC search rules.

California is notorious for this. Their search system is extremely literal and won't find filings with even minor variations. Always file amendments there if there's any doubt about the debtor name.