Now UCC It - Now You Do!

I thought that through the enactment of Article 9 of the Unification Commercial Code revision, the debtor name defaulting is over and the task of finding UCC's submissions becomes easier. The revised commercial code established standard search logic. In order to ensure that the name of the jurisdiction filer as a litmus test & # 39; I believe I believed that all debtor name problems in the financial statements were resolved once.

Wrong! Since adoption of revision code and interpretation of recent code problem emerged. We discuss some of these issues and when we submit UCC financial statements we will discuss what we can not control and how to mitigate risks.

The International Commerce Federation (IACA), consisting of Secretary of State responsible for indexing and managing UCC declarations, consists of standard search logic for searching applications in the index. At the IACA meeting in May 2007, the discussion of the collateral transaction section says that there are two important issues in judging whether the name of the obligor satisfies the requirement "not seriously misleading" I insisted. The first problem was how to index foreign text characters, the second problem was search logic.

Foreign letters (accent, umlaut, etc.) can not be entered on keyboards outside the United States, so it is a concern of the submitter (and filer). As a result, there is no agreement on how to enter these letters, but at first it may seem to be a small problem, but name indexing is done when an index search is performed It directly affects whether you can find that name sometimes. An example of how this affects the search can be demonstrated under the name E & # 39; LAN. Depending on the state computer system, the E & # 39 LAN may be indexed as ELAN or ELAN or E LAN. You can not add an accent mark above "e".

There is no consensus among countries as to how foreign texts should be indexed so that as a result three separate searches may be required to produce results when searched. Second issue discussed

IACA is concerned about those who conduct UCC investigation and UCC application processing. Members of the IACA, the Department of State staff in charge of index creation, did not need to notify them when the search logic was changed.

As you know, the search logic directly affects whether filing is "seriously misleading" and therefore effective or ineffective. Remember that if filing is positioned by state standard search logic, that file is not seriously misleading and will perfect security concerns.

Does the search logic change affect the previous filing? definitely! If the search logic is changed, the subsequent search may not produce the same result as the search in the file (assuming that the search was done to confirm filtering was done in the standard search log) .

It was not found when granting a loan that can suddenly launch UCC to the current location. Another possibility is that there is no sudden effect because an application you created and verified that you are not "seriously misleading" is not found by state search logic.

The court stated, "It is almost unlikely that secured creditors will be asked, rather than accurately recording the name of the obligor, and it has been revealed to abandon the guaranteed interest promise in accordance with law violations." See Tyringham Holdings, Inc., 354 BR 363 VA (2006). The explorer and filer do not dominate the search logic and we do not know whether the state chooses to change without notice.

Massachusetts State (2010) recently announced that in the world of UCC submission, only the exact name given to the search request is searched and consider changing to search logic just by returning an exact match, Some people may be interested in this wonderful news, but in some cases do not forget that spacing invalidates the file.

Host Am. Corp v. Costline Fin. Inc., 2006 US Dist. Lexis 35727 (D. Utah, May 30, 2006) The obligor name is KWM, which was modified to KWM after the file was created under the name KWM. Because Utah's search logic state was linked using the debtor's real name, the debtor's name was not present under KWM. Thus, the strict name standard may seem like a great idea, but in reality it can have very different results.

Another concern that you should have the federal tax authority center you submitted with the same index as UCC. Unlike financial statements that must conform to sections of code surrounding debtor names and standard search logic tests to verify whether financial statements are valid, federal tax authorities do not need to meet these requirements. Job seekers who only conduct searches in applicant institutions that rely solely on certified searches have their own dangers.

Because the Internal Revenue Service is not tied to the naming conventions that UCC applicants must follow, it is safe to say that because the only UCC search type that can find an unnamed debtor is an unidentified search, There is a security benefit. These hidden files are waiting behind a certified search tied to the standard search logic and unless you perform a search without marks, you make it blind that it exists in the index. Do not you think this will happen to you? Please review Re: Spearing Tool 2005 case WL 1430501 (6th 2005).

What can be done to reduce potential losses? The searcher can do a few things to prevent these problems. The first defense in determining other files to consider in determining potential priorities is an unqualified search with a wide range of search logic. Please remember that search logic can be changed. The only defense against fluid search logic is to adopt "accurate name criteria". Finally, if you enter exactly the names of all the judges as displayed in the organic document that depends on the name of the debtor, and the search logic changes occur, the name will be displayed in the documents that make up the organization As it is,

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