Personal Property Secured Transactions

• Published in: The Business Lawyer 2018-09, Vol.73 (4), p.1219-1242
• Main Authors: Weise, Steve, Sepinuck, Stephen L.
• Format: Article
• Language: English
• Subjects: Agreements; Automobiles; Chief executive officers; Collateral; Commercial law; Federal court decisions; Language; Litigation; Personal property; Secured transactions; State court decisions; Surveys; Survey—Uniform Commercial Code; Torts
• ISSN: 0007-6899; 2164-1838

[...]the nursery would recoup the funds advanced, while the farmer bore the risk of loss and had to pay all related insurance costs, fees, and taxes. [...]because the lender apparently re-filed in Florida less than one year after the equipment was moved to Florida, and, thus, the security interest remained continuously perfected, the court's error in analysis does not appear to have affected the result.78 C.Adequacy of a Financing Statement To be sufficient to perfect a security interest, a filed financing statement must provide the name of the debtor, provide the name of the secured party or a representative of the secured party, and indicate the collateral.79 Of these three requirements, the name of the debtor is the most important because financing statements are indexed by-and searches are conducted using-the debtor's name.80 A filed financing statement that lists an incorrect name for the debtor is not effective to perfect unless the financing statement would be disclosed in response to a search under the debtor's correct name, using the filing office's standard search logic.81 in several cases from last year the secured party erred in identifying the debtor in a filed financing statement, with the result that the security interest was ineffective to perfect. in In re Nay,82 a filed financing statement misstated the debtor's middle name as it appeared in the debtor's driver's license by identifying the debtor as "Ronald Mark Nay" instead of "Ronald Markt Nay." Because the middle name is part of the debtor's name, and a search under the debtor's full, correct name using the filing office's standard search logic would not produce the filing, the court ruled that the financing statement was ineffective to perfect.83 It did not matter that a search could be conducted without using the debtor's middle name.84 Courts reached a similar result in two cases involving an organizational debtor. [...]the lessor never paid the supplier for the equipment, so the city paid the supplier directly, thereby acquiring a defense to payment against any effort by the secured party. [...]the court never indicated what debtor name for the debtor the lender used in its financing statement when it re-filed in Florida. 79.