UCC proceeds of disposition issues after equipment auction - need help with proper filing
Had our construction equipment go to auction last month and now dealing with a mess around proceeds of disposition tracking. The original UCC-1 covered the excavator and dump truck as collateral, but when the auction house sold everything, they cut multiple checks to different parties and I'm not sure we handled the proceeds documentation correctly. The lender is saying our UCC filing doesn't properly cover the insurance settlement from the damaged loader that was also sold. Got conflicting advice from two different attorneys about whether we need to file a UCC-3 amendment to clarify the proceeds coverage or if the original filing language was sufficient. The auction happened 6 weeks ago and we're getting pressure to resolve this before the 90-day mark. Anyone dealt with similar proceeds of disposition complications where multiple payments went to different entities? Not sure if we're looking at a continuation issue or an amendment situation here.
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Marcus Marsh
Proceeds coverage can be tricky, especially with auctions involving multiple payment streams. The original UCC-1 language really matters here - did it specifically mention 'proceeds' or just list the equipment? Most standard forms include proceeds language but some older filings might not have been as comprehensive. You mentioned insurance settlement too - that's definitely proceeds territory and should have been covered if your original filing was done right.
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Katherine Shultz
•The original UCC-1 does say 'all proceeds' but the attorneys are arguing about whether that covers the insurance payout since it was processed separately from the auction. The auction house sent one check to us, another to the insurance company, and apparently there's a third payment we haven't even tracked down yet.
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Hailey O'Leary
•Insurance proceeds should definitely be covered under standard proceeds language. Sounds like the attorneys might be overthinking this - the key is whether the original collateral description was broad enough and included proceeds terminology.
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Cedric Chung
You're probably overthinking the UCC-3 amendment question. If your original filing said 'proceeds' then you should be covered for auction proceeds and insurance payouts. The 90-day thing you mentioned - is that some kind of lender requirement or are you thinking about continuation timing? Because continuation isn't due until 5 years from the original filing date.
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Katherine Shultz
•The 90-day deadline is something the lender mentioned about documenting the proceeds distribution. They want everything reconciled within 90 days of the disposition event. Not sure if that's a UCC requirement or just their internal policy.
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Talia Klein
•That sounds like a loan agreement requirement, not a UCC filing requirement. The UCC doesn't have a 90-day rule for proceeds documentation that I'm aware of. Check your loan docs for the specific requirements they're referencing.
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Maxwell St. Laurent
Had a similar situation last year with a restaurant equipment auction. What saved us was using Certana.ai's document verification tool - uploaded our original UCC-1 and the auction paperwork, and it instantly flagged that our proceeds language was actually more comprehensive than we realized. The tool cross-referenced everything and showed exactly what was covered. Might be worth checking your documents through their system before deciding on any amendments.
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Katherine Shultz
•Never heard of Certana.ai but that sounds exactly like what we need. How does their verification work - do you just upload the UCC documents?
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Maxwell St. Laurent
•Yeah, super easy - just upload your UCC-1 and any other related docs as PDFs. It automatically checks for inconsistencies and shows you exactly what your collateral description covers, including proceeds. Takes like 2 minutes and saved us from filing an unnecessary amendment.
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PaulineW
•This actually sounds useful for our situation too. We've been manually comparing documents and missing things. Going to check this out.
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Annabel Kimball
Multiple payment streams from auctions are normal - the auction house usually has to cut separate checks based on lien priorities and debtor instructions. The real question is whether your UCC-1 collateral description was broad enough to cover all the equipment that got sold. If the damaged loader wasn't specifically listed and your description wasn't generic enough to include it, that could be your problem right there.
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Katherine Shultz
•The loader was listed on the original filing but got damaged in an accident before the auction. Insurance paid out and then the damaged loader was sold for parts. That's where the confusion is coming from - multiple proceeds from the same piece of collateral.
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Chris Elmeda
•Oh that's definitely covered then. Insurance payout plus salvage sale proceeds from the same collateral item - both should fall under your proceeds coverage. The attorneys are definitely overthinking this one.
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Jean Claude
Before you do anything else, get copies of ALL the checks and payment documentation from the auction house. I've seen cases where they don't properly document who got what proceeds and it becomes a nightmare to unravel later. Also make sure you have the insurance settlement documentation showing it was for the same equipment listed on your UCC-1.
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Katherine Shultz
•Good point about the documentation. The auction house has been slow getting us copies of everything. We have the main proceeds check but still waiting on the detailed breakdown of all payments.
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Jean Claude
•Push them harder on that. Auction houses are notorious for sloppy paperwork and if you don't get it now, it'll be impossible to get later. You need a complete paper trail showing where every dollar of proceeds went.
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Charity Cohan
•This is why I hate dealing with auction houses. They act like they're doing you a favor by selling your stuff but then can't be bothered to provide basic documentation. So frustrating.
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Josef Tearle
Wait, you said two different attorneys gave you conflicting advice? That's a red flag right there. UCC proceeds rules aren't that complicated - if they can't agree on something this basic, you might want to find someone who actually knows secured transactions. This shouldn't be a debate between lawyers.
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Katherine Shultz
•One is our regular business attorney and the other is the lender's counsel. Our guy says file an amendment to be safe, their guy says it's unnecessary. Classic conflict of interest situation.
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Shelby Bauman
•Lender's counsel is probably right - they deal with UCC filings every day. Your business attorney might not be as familiar with secured transaction nuances. I'd lean toward the lender's advice on this one.
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Quinn Herbert
The insurance settlement part is definitely proceeds - that's textbook stuff. But you mentioned a third payment you haven't tracked down? That's concerning. Could be taxes, auction fees, or some other deduction. Need to account for every penny before you can properly reconcile the proceeds distribution.
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Katherine Shultz
•Yeah, the auction house mentioned something about environmental cleanup costs for the site where the equipment was stored. Apparently they deducted those costs from the proceeds but we never got an itemized breakdown.
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Quinn Herbert
•Environmental costs from proceeds? That seems sketchy unless it was specifically authorized. You need to demand a full accounting from the auction house immediately.
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Salim Nasir
•Environmental cleanup deductions without prior approval? That sounds like grounds for legal action against the auction house. They can't just decide to deduct costs from your proceeds.
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Hazel Garcia
Just went through something similar with medical equipment disposition. Used Certana.ai to verify our UCC documents covered all the proceeds properly and it caught an issue with our collateral description that could have caused problems later. The tool is really good at flagging potential gaps in coverage before they become expensive problems.
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Laila Fury
•How comprehensive is their checking? We've got a complex filing with multiple amendments and want to make sure everything aligns properly.
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Hazel Garcia
•It handles complex situations well - you can upload your whole UCC filing history as PDFs and it maps out the relationships between all the documents. Really helpful for catching inconsistencies.
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Geoff Richards
The 90-day timeline your lender mentioned is probably related to their loan workout procedures, not UCC requirements. Banks often have internal deadlines for resolving proceeds distribution issues to avoid regulatory compliance problems. Check your loan agreement for the specific language they're referencing.
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Katherine Shultz
•That makes sense. The lender has been pretty strict about timelines throughout this whole process. I'll dig into the loan docs to see what specific requirements they're invoking.
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Geoff Richards
•Banks get nervous about undocumented proceeds sitting around because it creates audit issues for them. They want clean paper trails showing where all the money went and why.
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Simon White
One thing nobody's mentioned - make sure your lender properly credited the proceeds against your loan balance. I've seen cases where the disposition proceeds got lost in the shuffle and borrowers kept getting charged interest on debt that should have been paid down. Document everything!
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Katherine Shultz
•Good catch - we haven't verified the loan balance reduction yet. Been so focused on the UCC compliance issues that we didn't think to check the actual crediting of proceeds.
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Simon White
•That should be your first priority honestly. The UCC stuff is important but making sure you're not paying interest on money they already received is more urgent.
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Hugo Kass
•Absolutely this. Banks are notorious for slow proceeds processing and you end up paying extra interest while they figure out their internal accounting.
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Nasira Ibanez
The environmental cleanup deduction thing bothers me. Unless you specifically agreed to those costs being deducted from proceeds, the auction house might have overstepped. They're supposed to deliver net proceeds to secured parties, not decide on their own what costs to deduct. This could be a bigger issue than the UCC filing question.
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Katherine Shultz
•We never authorized any environmental cleanup costs. The equipment was stored at our facility and there were no known environmental issues when it went to auction.
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Nasira Ibanez
•That's a red flag. You need to demand documentation showing what these costs were for and under what authority they were deducted. This might be actionable against the auction house.
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Khalil Urso
•Sounds like the auction house is trying to pass their costs onto you without authorization. I'd be talking to an attorney about recovering those improperly deducted funds.
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Myles Regis
Reading through all this, it sounds like your UCC filing is probably fine and the real issues are with the auction house's handling of the proceeds. The original 'all proceeds' language should cover insurance payouts and auction proceeds. Focus on getting a complete accounting from the auction house rather than worrying about UCC amendments.
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Katherine Shultz
•You're probably right. We've been so worried about the UCC compliance that we haven't pushed hard enough on the auction house documentation. Going to demand a complete accounting this week.
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Myles Regis
•That's the right approach. The UCC side sounds solid based on what you've described. The auction house is where your problems are coming from.
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