Understand how to conduct thorough UCC searches for your next case.
Lenders and other creditors need to know where they stand if a debtor becomes bankrupt. Primarily, this is a function of whether they have a lien or security interest and if so, whether anyone else has a prior lien or security interest. Liens generally must be made public in some way, usually by a filing in a public office, in order to enjoy priority, so prospective lenders and creditors will want to search for those liens. Notwithstanding Article 9 of the Uniform Commercial Code, the law that governs most consensual security interests, lien searching remains an art. Issues remain regarding what name to search, where to search and how to deal with past transactions conducted by the debtors predecessors in interest or by the debtor under prior names or in prior locations. In addition, other liens not governed by Article 9 must be taken into account and those liens are not held to the same standards that affect searchability as Article 9 security interests. Searching is not a mechanical process and there is no procedure that guarantees comprehensive results in every case. In short, searchers need to understand their opportunities so they can balance their costs against their risks.
Types of Searches
ï Real Estate
ï Uniform Commercial Code Security Interests
ï Intellectual Property ñ Patents, Trademarks and Copyrights
ï Domain Names
ï Aircraft, Rolling Stock and Vehicles
ï Other Matters
Who to Search
ï Who Is the Debtor?
ï Prior Owners
ï Parties to Prior Mergers and Conversions
ï Prior Names
Where to Search
ï Debtor Location
ï Prior Locations
ï Filing Office
ï Collateral Locations
ï Judicial Liens
ï What Is the Debtor's Name?
ï Understanding Standard Search Logic
ï Effect of No Search Logic
ï Special Rules ñ Estates and Trusts
ï The Organization Name Issue
ï Names of Individuals
ñ Potential Statutory Safe Harbor
Other Search Issues
ï Special Rules for Tax and Other Statutory Liens
ï Interpreting Search Results
ñ Are Amendments and Other Terminations Trustworthy?
ñ Apparent Legal Flaws
ñ Rogue Amendments and Bogus Filings
Conclusion ñ Client's Informed Consent
Darrell W. Pierce with Dykema Gossett PLLC
NALA ,NFPA ,Paralegals ,Additional credit may be available upon request.