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Inaccurate Financing Statement
Sure, it happens. People make mistakes. But, when does a mistake made on a financing statement render it 'seriously misleading' under revised Uniform Commercial Code '9-506 and thus ineffective to perfect an asserted security interest? The Bankruptcy Court for the Southern District of Florida recently addressed this issue in the case of In re John's Bean Farm of Homestead Inc. No. 07-11868-BKC-LMI (Nov. 1, 2007).
Case History
The debtor, a Florida corporation that owned and operated a commercial bean farm, borrowed nearly $200,000 to purchase a piece of farm equipment. While the loan was surprisingly never memorialized in writing, after the debtor defaulted, the creditor purported to take a security interest in the equipment, evidenced by a Security Agreement and Secured Promissory Note. However, in an attempt to perfect this security interest, the creditor filed a UCC-1 Financing Statement with the Florida Secured Transaction Registry, which mistakenly identified the debtor as 'John Bean Farms, Inc.' instead of the debtor's actual name of incorporation, 'John's Bean Farm of Homestead, Inc.' In fact, as the court noted, all of the documents evidencing the transaction used the name 'John Bean Farms, Inc.' The debtor's financial troubles continued and a Chapter 7 bankruptcy was filed. The creditor filed a proof of claim asserting a total claim in the amount of $152,000, claiming $120,000 was secured and $32,000 was an unsecured priority claim.
Major Differences In UK, U.S. Copyright Laws
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The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
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The Anti-Assignment Override Provisions
UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?