In his article, “All Means All, But Some Does Not Always Mean Some When It Comes to UCC Financing Statement,” Kutak Rock partner Bruce Wilson explains the valuable instruction provided by two recent Article 9 decisions on drafting collateral descriptions. The article was published in the July/August 2019 issue of Pratt’s Journal of Bankruptcy Law. 

In In re The Financial Oversight and Management Board for Puerto Rico, 914 F.3d 694 (1st Cir. 2019) (“ERS”), the First Circuit Court of Appeals held that a UCC-1 financing statement describing the collateral solely by referring to the applicable security agreement contained an insufficient collateral description. The First Circuit also concluded, however, that defects in the initial UCC filing were cured by a subsequent UCC financing statement amendment.

The United States Bankruptcy Court for the Central District of Illinois, in In re 180 Equipment, LLC, 591 B.R. 353 (Bankr. C.D. Ill. 2018) (“180 Equipment”), addressed a substantially similar issue in which a UCC-1 financing statement described collateral only by cross-referencing the applicable security agreement. After noting that “no published opinion by any court addresses this exact issue,” the 180 Equipment court also held that the financing statement at issue failed to adequately describe the related collateral. 180 Equipment, 591 B.R. at 356.

Mr. Wilson analyzes each case and breaks down the details into useful lessons and conclusions. With more than 30 years of experience, he focuses his practice on bankruptcy, workout, and UCC matters, including structuring new transactions, securitizations and bond financings, resolving disputes in troubled transactions and workouts, and enforcing remedies.

Article: All Means All, But Some Does Not Always Mean Some When It Comes to UCC Financing Statement