Pub. 6 2011-2012 Issue 1

www.nebankers.org 20 Extraordinary Service for Extraordinary Members. The amendments provide more certainty to secured creditors. If the debtor is an individual to whom Nebraska has issued a driver’s li- cense that has not expired, then a financing statement must provide the individual’s name as reflected on the driver’s license. For example, under the facts in the Borden case, if the driver’s license indicates the indi- vidual’s name is “Michael Borden,” a secured creditor must indicate that the debtor’s name is “Michael Borden” on its financing statement. So long as a financing statement provides an individual’s name as indicated on the debtor’s unexpired Nebraska driver’s license, the financing statement will be deemed to sufficiently identify the debtor’s name. (NOTE: If the debtor holds two Nebraska-issued driver’s licenses, the most recently issued driver’s license is determinative.) Alternatively, if the debtor does not have an unexpired Nebraska driver’s license, the financing statement must provide the “individual name of the debtor or the surname and first per- sonal name of the debtor.” Some commentators have ex- plored the possible risks of using a debtor’s driver’s license name on financing statements. For example, if the debtor’s driver’s license expires or is renewed with a new name, a previously filed financing statement may no longer meet the UCC require- ments for sufficiently identifying an individual’s name. When a driver’s license is renewed with a new name, the secured party must follow the rules for a debtor’s name change, and has four months to file an amended financing statement properly identify- ing the debtor. When a driver’s license expires, the debtor no longer has a valid Nebraska driver’s license, and a financing statement must provide the debtor’s individual name or the debtor’s surname and first personal name. Presumably, in many instances the name on the debtor’s driver’s li- cense will be the same as the debtor’s individual name or debtor’s surname and first personal name. In those cases the secured party need not take any action for its security interest to remain perfected. However, if the debtor’s name on his or her driver’s license is different from the debtor’s individual name or debtor’s surname and first personal name, then the se- cured party must follow the rules for a debtor’s name change, and has four months to file an amended financing statement properly identifying the debtor’s name. In addition, it should be noted that an individual’s name identified on his or her driver’s licensemay be incorrect. For example, an individual’s driver’s license may identify the name “John Doe,” while the individual’s correct name is actually “Jon Doe.” Under the new rule, the secured party must still use the name on the driver’s license— “John Doe”—even if it knows the indi- vidual’s name is really “Jon Doe.” In this situation, the secured party also may want to include the name “Jon Doe” as an additional debtor on the financing statement so the secured party’s financing statement remains effective if the debtor corrects his name on his driver’s license. • Debtor’s Name When the Debt- or is a Registered Organization Another change affects financ- ing statements when the debtor is a registered organization. The pre- amendment rule stated that a financ- ing statement sufficiently provided the debtor’s name only if the financing statement provided the debtor’s name indicated on the public record of the debtor’s jurisdiction. Confusion could result if the registered organization’s name on its organizational documents differed from its name as shown in the state’s public records. For example, a corporation’s articles of incorporation may identify its name as “A and B, Inc.,” while the secretary of state’s online searchable database may identify the same corporation as “A & B, Inc.” The amendment states that, where the debtor is a registered organization or if the collateral is held in a trust that is a registered organization, a financ- ing statement sufficiently provides the debtor’s name only if it mirrors the name on the registered organiza- tion’s “public organic record.” A public organic record is the record initially filed by the registered organization with the state to form or organize the registered organization, such as articles of incorporation. The amendment clarifies that secured parties must look to the registered organization’s public organic record to determine its name, and should not rely on information found in other public records and searchable databases. (NOTE: If there is more than one public record stating the debtor’s name, the name to provide on a financing statement is the debtor’s name as reflected in the most recently filed public organic document.) Q UCC Article 9 — continued If the debtor’s driver’s license expires or is renewed with a new name, a previously filed financing statement may no longer meet the UCC requirements for sufficiently identifying an individual’s name.