CT Lien Solutions Blog

Revised matrix - State-by-state breakdown of new Article 9 legislation

Click here to download our latest state-by-state breakdown outlining the individual states' adoption of the new amendments to Article 9 of the Uniform Commercial Code. This new matrix reflects the recent enactments by Arkansas, the District of Columbia and Wyoming, and the introduction of legislation by California.

We will periodically keep you updated as the legislation continues to change, so check back into the blog frequently.

*For more information about the various provisions of the model act, visit the “Legislation and Judgments” category of this blog.

Wyoming increases UCC-1 effectiveness from 5 to 10 years

On February 14, 2013, Governor Matt Mead signed House Bill 3 into law, which will extend the effectiveness period of UCC financing statements from the current 5-year duration to 10 years. The change will be effective on July 1, 2013, which coincides with the date the 2010 Amendments to Revised Article 9 will also become effective in that state.

The new law states that financing statements filed after July 1, 2013 will be effective for 10 years, not 5 years as current law provides. The filing of a UCC-3 continuation statement after July 1, 2013 will extend the effectiveness of the financing statement for an additional 10-year period. There is no change to the effectiveness period of currently active financing statements filed before July 1, 2013 if a continuation is not filed after the new law takes effect.

The bill was authored by the Joint Committee on Corporations, Elections, and Political Subdivisions, which considered the issue in 2012. In testimony before the Committee, Jeri Melsness of the Secretary of State’s Office noted that the Wyoming Bankers Association approached her office to see if they would be open to extending the 5-year timeframe. They explained that because the costs of equipment covered by these UCC financing statements has gone up, the result has been longer duration periods for loans secured by such equipment.

With this change, as of July 1st, Wyoming will be the only state with a non-uniform effectiveness period of 10 years. Other states that previously had non-uniform effectiveness periods (Maryland and Arizona, for example) restored the 5-year rule with the adoption of the 1998 amendments to old Article 9.

UCC Article 9 seminar recording available

Missed the last CT Lien Solutions UCC Article 9 seminar or webinar? Now you can listen to it online at your convenience.

Please join our experts as they share recent findings and best practices acquired over 30+ years of experience with filing and searching public records. In addition to best practices in search and filing, this webinar will also cover upcoming amendments to the Article 9, case law, search strategies and more.

Please note that CLE credit is not available for this recording.

The latest amendments to UCC Article 9 - What's new for 2013?

In July 2013, the new amendments to the UCC Article 9 will take effect in most states. And lenders and law firms are asking: what does this mean for us?

The best summary of the new amendments that we’ve seen is Edwin E. Smith’s article published in the UCC Law Journal, Vol. 42, No. 4 (2010), published by West, a Thomson Reuters business.

Edwin Smith, Partner at Bingham McCutchen, is one of the country's leading authorities on Article 9. Having actively participated in the drafting of a number of the recent revisions to the Uniform Commercial Code (UCC), Chambers USA, 2005 notes he “probably knows as much about UCC as anybody in the country.”

Mr. Smith's article describes the substance of each of the revisions, including those involving:

• Changes related to the filing rules
• Changes unrelated to filing
• Transition rules

Access CT Lien Solutions’ co-branded reprint of Mr. Smith’s article here.

Revised matrix - State-by-state breakdown of new Article 9 legislation

Click here to download our latest state-by-state breakdown outlining the individual states' adoption of the new amendments to Article 9 of the Uniform Commercial Code.

We will periodically keep you updated as the legislation continues to change, so check back into the blog frequently.

*For more information about the various provisions of the model act, visit the “Legislation and Judgments” category of this blog.

February jurisdictional holidays

Set forth below is the State Holiday List for the month of February 2013. As always, please bear in mind that these dates are accurate as of the date of publication, but subject to change as states often make last minute revisions to their holiday closing schedules.

State	Holiday	Date
CT, IL, MO	Lincoln’s Birthday	February 12
AL (Baldwin and Mobile Counties only), LA	Mardi Gras	February 12
AK, AZ, CA, CO, HI, ID, ME, MD, MI, MN, MT, NE, NV, NH, NJ, ND, OH, OK, OR, PA, SC, SD, TN, TX, UT, VT, WA, WV, WY	Presidents’ Day (In MT, Lincoln and Washington’s Birthday; in UT, Washington and Lincoln Day)	February 18
AL (also Thomas Jefferson's birthday), AR (also Daisy Gatson Bates Day), CT, DC, IL, LA, MA, MS, MO, NY, VA	Washington’s Birthday	February 18

Texas adopts new UCC forms

The state of Texas has adopted new UCC forms that become effective July 1, 2013. A 30-day grace period will be allowed beginning July 1, 2013 and ending July 31, 2013, whereby the filing of old forms will still be accepted by the TX filing office. Beginning August 1, 2013, all forms but the new ones will be rejected. The prescribed forms will be available July 1, 2013 at the TX SOS website.

January jurisdictional holidays

Set forth below is the State Holiday List for the month of January 2013. As always, please bear in mind that these dates are accurate as of the date of publication, but subject to change as states often make last minute revisions to their holiday closing schedules.

State	Holiday	Date
ALL	New Year’s Day	January 1
VA	Lee – Jackson Day	January 18
ALL	Martin Luther King, Jr.’s Birthday* (*In AL, AR and MS, also Robert E. Lee’s Birthday; in ID, also Idaho Human Rights Day; in WY, also WY Equality Day)	January 21

December jurisdictional holidays

Set forth below is the State Holiday List for the month of December 2012. As always, please bear in mind that these dates are accurate as of the date of publication, but subject to change as states often make last minute revisions to their holiday closing schedules.

State	Holiday	Date
AL, AR, IL, IN, KS, KY, LA, MI, NC, ND, OK, SC, SD, TN, TX, VA, WI	Christmas Eve	December 24
MD	Service Reduction Day	December 24
GA, IN	Washington’s Birthday (observed)	December 24
ALL	Christmas Day	December 25
NC, SC, TX	Day Following Christmas	December 26
MD	Service Reduction Day	December 31
KY, LA, MI, TN, TX, WI	New Year’s Eve	December 31

Recent Texas case highlights importance of use of correct debtor name

CNH CAPITAL AMERICA LLC v. PROGRESO MATERIALS LTD, et al
(USDC – Southern District of Texas). October 25, 2012

Facts: This dispute arises out of the financing and two sales of some equipment--an Ahern Asphalt Plant and a Kawasaki Wheel Loader. CNH Capital America LLC (CNH) financed the purchase of both pieces of equipment by Progreso Materials, Ltd (Progreso). CNH contends that Progreso granted a security interest to CNH which CNH properly perfected.

Ultimately, the equipment was sold to Upper Valley Materials, LLC by Progreso. Upper Valley denies that CNH properly perfected a security interest in the equipment.

CNH seeks a declaration that Upper Valley's interest in the equipment is subordinate to CNH's security interest and CNH seeks to foreclose on the equipment.

As evidence of perfection, CNH presented a copy of the UCC-1 Financing Statement filed with the Texas Secretary of State showing Progreso as the debtor. On the financing statement, however, the letter “s” was omitted from the word “Materials” in the debtor name as listed.

At Issue: The Court first analyzed whether CNH had established that there was a security interest in the loader. Second, if there was a security interest in the loader, the Court would then determine whether CNH had established that it perfected that security interest. Finally, if the Court determined that there was an unperfected security interest in the loader, the Court would evaluate if CNH may, nevertheless, enforce its unperfected security interest against Upper Valley.

Decision: The Court decided that the UCC-1 Financing Statement did NOT perfect CNH’s interest in the equipment as the filing was deemed to be seriously misleading.

Correct Name of Debtor: Progreso Materials, Ltd.
Debtor Name on UCC-1: Progreso Material, Ltd.

A search of the Texas Secretary of State UCC database using the State’s search logic does not reveal CNH’s financing statement when the correct name is used. The Court reviewed the applicable portion of the Texas Administrative Code which establishes the standard search logic and was further persuaded that the omission of the "s" from “Materials” would have prevented a searcher using the standard search logic from discovering the financing statement if the searcher used Progreso's correct name.

The Court also went on to conclude that although CNH might prevail in enforcing its unperfected lien if Upper Valley (the Buyer) had actual knowledge of the lien, CNH did not demonstrate that it perfected a security interest in the loader or that Upper Valley had actual knowledge of the security interest. As such, CNH may not foreclose on the loader at this time.