Article 9 of the Uniform Commercial Code sought to create consistent commercial laws governing secured transactions across the United States. One of its principal tenets is that secured lenders must provide notice to other lenders of their stake in a debtor’s personal property or fixtures. Secured lenders do so by filing a financing statement, a form that third parties can access to see who has a security interest in what. Two important aspects of the financing statement are the collateral indication and the debtor name. This Note will explore the nuances of the collateral indication and debtor name in light of In re Financial Oversight and Management Board for Puerto Rico and In re I80 Equipment, LLC, cases arising out of the First and Seventh Circuits, respectively. This Note argues that Article 9’s collateral indication requirements on the financing statement must not be construed to require third parties to search outside a secured lender’s filings to determine what collateral may be subject to a security interest. Requiring would-be creditors to do so is against the express purposes of the Uniform Commercial Code and creates uncertainty and an unnecessary burden for such creditors when conducting their diligence. This Note further argues that the First Circuit was wrong in its determination that the financing statement did refer to the debtor in question because when a novel issue arises under Article 9, an interpretation that promotes one or more of the Code’s stated purposes should be preferred.
Eric M. Sherman, Chasing Perfection: Collateral Indications and Ambiguous Debtor Names on Financing Statements Under Article 9, 61 B.C. L. Rev. 2229 (2020), https://lawdigitalcommons.bc.edu/bclr/vol61/iss6/7