UCC filing state confusion - debtor moved between states during loan process

The security agreement was signed after they moved, so technically the new state. But we had already started the filing process in the original state.

Then you likely need to file in the new state. The timing of the security agreement execution is what matters for determining proper filing jurisdiction.

That seems like overkill. Isn't there a specific rule about which state governs?

There is, but when you're dealing with substantial loan amounts, sometimes redundancy is worth the peace of mind. Our borrower was a Delaware LLC that moved operations, which added another layer of complexity.

The redundancy approach makes sense. I'm just worried about creating confusion if we have filings in multiple states.

That's interesting - I hadn't heard of that tool. Did it help clarify which state you should file in?

It doesn't make the jurisdiction decision for you, but it ensures all your documents are consistent before you file. We found our debtor name was slightly different on the security agreement vs. the UCC-1, which would have been a major problem.

It's mobile construction equipment - dozers and excavators that move between job sites. So debtor location rules would apply?

Exactly. For mobile equipment, you follow the debtor location rules under Article 9. Equipment location only matters for fixtures or certain specific types of collateral.

This is why I hate equipment financing. Too many variables compared to straight inventory financing.

The move happened about 6 weeks before the security agreement was signed. So we're well within the four-month window, but I filed in the wrong state initially.

If the security interest attached after the move, you probably need to file in the new state. The four-month rule would apply if they moved after attachment.

Wait, I thought the four-month rule was about continuing effectiveness, not initial filing requirements.

It's an LLC organized in Delaware but operating in multiple states. Does that mean Delaware filing?

Yes! For registered organizations like LLCs, you file where the entity is organized, not where it operates. So Delaware would be correct.

This is exactly why I always confirm entity type and organization state first. Saves so much confusion later.

So my original filing state doesn't matter at all? It should have been Delaware from the start?

Exactly. The debtor's physical location changes are irrelevant for LLCs. It's all about where the LLC was formed.

How does that tool work exactly? Do you just upload the documents?

Yeah, you upload your charter documents and UCC-1, and it cross-checks everything - entity names, organization state, addresses. Takes like 2 minutes and catches mistakes that could cost thousands.

I'm definitely going to check that out. This filing mistake has been keeping me up at night.

That's incredibly helpful. I need to terminate the incorrect filing and get a proper Delaware UCC-1 filed ASAP.

Make sure you file the new one before terminating the old one, just to avoid any gap in perfection.

That makes me feel better. So this is a common source of confusion?

Very common. The individual vs. entity debtor rules trip people up all the time. Once you know the debtor is a registered organization, it's straightforward.

The UCC rules are actually pretty clear once you know which section applies. It's just determining the debtor type that's tricky sometimes.

Will do! Planning to file in Delaware tomorrow and then terminate the incorrect filing once the new one is accepted.

Smart approach. Better safe than sorry with lien perfection.