We’re happy to welcome again visitor writer, lawyer, Bennett L. Cohen to the FCS weblog! Learn on for the ninth installment in his weblog collection addressing the intricacies of UCC Termination Statements.
UCC Termination Statements, a Lure for the Unwary: Half 9
Some secured events truly instruct a search firm to exclude terminated financing statements from the search outcomes, based mostly on the mistaken perception that terminated UCC statements can not be efficient. This observe could be very dangerous as there are lots of “unauthorized” terminations being filed all through the nation, as mentioned above, and excluding terminations from a UCC search prevents a secured social gathering from reviewing and evaluating every termination.
Let’s look at some observe tricks to keep away from the chance of being stung by an “unauthorized UCC termination”
A secured social gathering ought to at all times receive a full UCC search (which search ought to embrace all UCC filings of file in addition to all terminations nonetheless of file).
Each UCC termination in a UCC search must be rigorously scrutinized to make sure it was an “licensed” termination. Prior secured events who’ve terminated UCC statements needs to be contacted to confirm that the UCC terminations had been licensed by such secured events. A letter or e mail from every such prior secured social gathering confirming that their UCC terminations had been licensed can be a conservative requirement. In these instances during which it isn’t clear that the filed terminations had been licensed by the secured social gathering, it could be fascinating to have the prior secured social gathering authorize you to terminate their filings.
In regards to the Writer
Bennett L. Cohen is a companion within the legislation agency of Cohen, Salk & Huvard, P.C. in Northbrook, Illinois, a Chicago suburb. Bennett frequently represents banks, industrial finance corporations, insurance coverage corporations and different institutional lenders within the structuring, documentation and shutting of economic financing transactions, together with asset-based loans, industrial loans, industrial actual property mortgage and building loans, mezzanine loans, leveraged acquisitions, tools lease loans and factoring transactions. Bennett is a member of the American Bar Affiliation and serves on the ABA Committee on Industrial Monetary Companies and the ABA Subcommittees on Secured Lending, Mortgage Documentation and the Uniform Industrial Code. Bennett will be contacted at bcohen@cshlegal.com.