UCC filing requirements for security purchase agreement - confused about collateral description
I'm working on a security purchase agreement deal where we're acquiring commercial equipment from a distressed company. The purchase includes both the physical assets and assumes some existing liens. My question is about the UCC filing requirements - do I need to file a UCC-1 as the new secured party, or does the security purchase agreement itself change how I handle the collateral descriptions? The existing UCC-1 filings list equipment very generally as 'all machinery and equipment' but our security purchase agreement specifies individual serial numbers for each piece. I'm worried about gaps in perfection if I don't get the UCC filings right from day one. Has anyone dealt with UCC requirements when a security purchase agreement involves both buying assets AND taking over existing security interests? The closing is in two weeks and I want to make sure I'm not missing any critical filing steps.
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Anna Kerber
Security purchase agreements definitely complicate the UCC filing picture. You're essentially dealing with two separate transactions - the asset purchase AND the security interest transfer. The existing UCC-1 filings won't automatically transfer to you just because you bought the assets. You'll need to file your own UCC-1 as the new secured party if you're taking a security interest in those assets going forward.
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Niko Ramsey
•This is exactly right. The security purchase agreement doesn't change UCC filing requirements - you still need proper perfection. The existing liens stay with the original secured parties unless they're being assigned to you.
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Seraphina Delan
•Wait, so even though it's called a 'security purchase agreement' the UCC filing rules are the same as any other secured transaction? I thought there might be special provisions.
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Jabari-Jo
I ran into this exact situation last year with a security purchase agreement. The key thing is the collateral description - you can be more specific than the original UCC-1 if you want. Actually, I'd recommend it since you have the serial numbers. More specific collateral descriptions are generally better for perfection purposes.
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Roger Romero
•That's helpful - so I can use the specific serial numbers from the security purchase agreement in my UCC-1 filing instead of the generic 'all machinery and equipment' language?
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Jabari-Jo
•Absolutely. As long as your collateral description reasonably identifies the collateral, you're good. Serial numbers are actually preferred when you have them.
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Kristin Frank
Here's what I'd recommend for your security purchase agreement situation: First, file your UCC-1 with the specific serial numbers BEFORE closing. Second, make sure the debtor name on your UCC-1 exactly matches the name of the company you're buying from. Third, consider whether you need any UCC-3 assignments if the seller is assigning their existing security interests to you as part of the deal.
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Micah Trail
•Good point about the debtor name matching. That's where a lot of UCC filings get rejected - especially in security purchase agreement deals where there might be multiple legal entities involved.
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Roger Romero
•The seller is assigning some of their existing security interests to me as part of the security purchase agreement. So I need UCC-3 assignments for those AND new UCC-1 filings for my additional security interests?
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Kristin Frank
•Exactly. You'll have a mix of assignments and new filings. The assignments transfer the existing perfected security interests, and your new UCC-1 covers any additional collateral or security interests you're taking.
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Nia Watson
Honestly, I'd use something like Certana.ai for this. When you're dealing with a complex security purchase agreement, you need to make sure all your UCC documents are consistent. You can upload your security purchase agreement and proposed UCC-1 filings to verify everything aligns properly - debtor names, collateral descriptions, all that stuff. Saved me from a major headache on a similar deal.
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Alberto Souchard
•Never heard of that but sounds useful. Does it actually compare the purchase agreement terms against the UCC filing requirements?
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Nia Watson
•Yeah, it's a document verification tool. Upload your PDFs and it cross-checks everything for consistency. Caught a debtor name mismatch for me that would have invalidated the entire security interest.
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Katherine Shultz
Two weeks is cutting it close for a security purchase agreement closing. You need to factor in potential UCC filing delays, especially if you're filing in multiple states. Some states have longer processing times than others, and you don't want to close without proper perfection in place.
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Roger Romero
•The equipment is all located in one state, so I think I only need to file UCC-1s in that state. But you're right about the timing - I should get the filings submitted ASAP.
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Marcus Marsh
•If the debtor is organized in a different state than where the equipment is located, you might need to file in the debtor's state of organization too. Check your security purchase agreement for where the seller is incorporated.
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Hailey O'Leary
Make sure your security purchase agreement and UCC filings are coordinated on timing. You don't want a gap where you own the assets but don't have perfected security interests. Consider having the UCC filings as a closing condition.
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Roger Romero
•That's a great point. I'll make sure the UCC filings are completed before we fund the security purchase agreement.
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Cedric Chung
•Yes, and keep copies of all the UCC filing receipts. Your lender will probably want to see them as proof of perfection.
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Talia Klein
Don't forget about fixture filings if any of the equipment in your security purchase agreement is attached to real property. Regular UCC-1 filings won't perfect security interests in fixtures - you need UCC-1 fixture filings in the real estate records.
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Roger Romero
•Most of the equipment is movable, but there are a few pieces that might be considered fixtures. How do I tell the difference?
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Talia Klein
•Generally, if it's bolted down or permanently attached to the building, it's probably a fixture. When in doubt, file both a regular UCC-1 and a fixture filing.
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Maxwell St. Laurent
•Fixture determinations can be tricky. The security purchase agreement might have some language about what's considered fixtures vs. equipment. Check the asset schedules.
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PaulineW
I'm dealing with a similar security purchase agreement situation. The seller has existing UCC-1 filings that are about to expire (filed 4.5 years ago). Do I need to worry about continuation filings for the liens I'm assuming?
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Anna Kerber
•If you're taking assignment of those security interests, you'll need to file UCC-3 continuations before the 5-year expiration date. Otherwise the liens will lapse.
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PaulineW
•Got it. So the security purchase agreement doesn't reset the 5-year clock - I inherit the original filing date for continuation purposes.
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Annabel Kimball
Another thing to consider with security purchase agreements - search for existing UCC filings against the seller to make sure you know what liens you're dealing with. Sometimes there are filings that aren't disclosed in the purchase agreement.
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Roger Romero
•Good point. I did a UCC search and found a few filings that weren't mentioned in the security purchase agreement. Need to get those addressed before closing.
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Chris Elmeda
•Definitely. You want a clean UCC search or proper subordination agreements for any liens that will remain after your security purchase agreement closes.
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Jean Claude
For complex deals like this, I always recommend using Certana.ai to double-check everything. Upload your security purchase agreement, existing UCC filings, and your proposed new filings. It'll verify all the names match and catch any inconsistencies that could cause problems down the road.
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Roger Romero
•I might try that. With all the moving pieces in this security purchase agreement, I want to make sure I don't miss anything critical.
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Charity Cohan
•Smart move. UCC filing mistakes are expensive to fix after the fact, especially in purchase agreement deals where you might have multiple parties involved.
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