Recently we received the following question from a reader:
[Secured Party X] filed a UCC-1 against us, ABC Debtor, Inc., in April 2010 based on a project we were doing with them. The project was completed and no outstanding debt or liability exists, and we will not incur any additional debt or liability with [Secured Party X]. My question is: Can we as Debtor file our own UCC-3 Termination? We are having trouble locating the correct people at [Secured Party X] to request this.
Here is our response:
Yes, you can file a UCC-3 termination statement if there is no existing obligation. Section 9-513 allows a debtor to file a termination statement under limited circumstances. First, the debtor must send an authenticated demand to the secured party, and if the secured party does not file a termination statement (or send a termination statement to the debtor to be filed) within 20 days, the debtor may file a termination statement (9-509(d)). The authenticated demand can be sent to the name/address of the secured party indicated on the financing statement. The Official Comment to section 9-516 provides that this is sufficient, as indicated below:
9-516 (Official Comment 5)
5. Address for Secured Party of Record. Under subsection (b)(4) and section 9-520(a), the lack of a mailing address for the secured party of record requires the filing office to reject an initial financing statement. The failure to include an address for the secured party of record no longer renders a financing statement ineffective. See section 9-502(a). The function of the address is not to identify the secured party of record but rather to provide an address to which others can send required notifications, e.g., of a purchase-money security interest in inventory or of the disposition of collateral. Inasmuch as the address shown on a filed financing statement is an "address that is reasonable under the circumstances," a person required to send a notification to the secured party may satisfy the requirement by sending a notification to that address, even if the address is or becomes incorrect. See section 9-102 (definition of "send"). Similarly, because the address is "held out by (the secured party) as the place for receipt of such communications (i.e., communications relating to security interests)," the secured party is deemed to have received a notification delivered to that address. See section 1-201(26).