UCC goods definition causing collateral description issues on filing

Thanks, that helps clarify the raw materials part. But what about when the equipment gets permanently installed? Does it stop being goods at that point?

Once it's permanently attached to real estate, it could become a fixture, which requires a different filing approach. You might need a fixture filing instead of or in addition to your regular UCC-1.

Did you end up filing separate UCCs for different stages of the equipment? Trying to figure out if we need multiple filings here.

We did one comprehensive filing but broke down the collateral description into categories: raw materials inventory, work-in-process goods, finished goods, and then noted potential fixture filings for permanently installed items.

Wait, can you really cover work-in-process under goods? I thought there were special rules for that.

Never heard of that - how does it work exactly? Just upload the PDFs?

Yeah, super simple. Upload your loan agreement and draft UCC-1, it cross-checks the collateral descriptions and flags any mismatches or vague language that might get rejected. Catches stuff like goods vs fixtures distinctions.

I feel your pain. The portal error messages are completely useless. You basically have to guess what they want and refile until something sticks.

Exactly! And then you're racing against deadlines while they take their sweet time processing each attempt.

This is super helpful! Should I include specific equipment types or keep it general like this?

Include equipment types if you know them - 'manufacturing machinery,' 'assembly line equipment,' etc. But the staged approach covers you as the goods transform through your process.

One thing to watch out for - if any of that equipment becomes fixtures, you might need fixture filings in the real estate records too, not just the UCC files.

Client is organized in Delaware but manufacturing is in Ohio. We're filing in Delaware based on the debtor's location rule.

Good, that's correct for goods. Delaware should accept a comprehensive collateral description if you follow the staged approach mentioned above.

That's actually smart practice for borderline cases. The cost of dual filings is usually worth the certainty, especially on larger facilities.

Same here. I'd rather overfile than have a priority dispute later when the equipment status is unclear.

That's a good point about timing of attachment. Our security interest attaches when we advance funds, which is before any installation happens.

Perfect, then you're dealing with goods at attachment. Just make sure your collateral description covers the potential transformation to fixtures.

How much does something like that cost? Sounds useful but wondering if it's worth it for smaller deals.

I don't focus on cost when it prevents rejections and delays. Time savings alone makes it worthwhile, especially when you're racing deadline pressure like this situation.

That's really helpful perspective. So I should assume goods unless there's a specific reason it's not?

Exactly. Start with goods and then ask if there's any reason it falls into one of the other defined categories. Much easier than trying to fit everything into the goods definition from scratch.

Great way to think about it. The UCC definitions work by exclusion - goods is what's left after you remove all the specifically defined categories.