Pub. 6 2011-2012 Issue 1

May/June 2011 21 Extraordinary Service for Extraordinary Members. Q UCC Article 9 — continued on page 22 • Debtor’s NameWhen Collateral Is Administered by a Personal Representative Although infrequent, there are times when the secured creditor’s collateral is being administered by the personal representative of a decedent’s estate. In such case, the amendments clarify that the financing statement must provide the decedent’s name as the debtor’s name, and, in a separate part of the financing statement, indicate that a personal representative is admin- istering the collateral. (NOTE: The name of the decedent as indicated on the order appointing the personal representative is sufficient as “the name of the decedent.”) • Debtor’s Name When the Col- lateral Is Held in Trust It is important to note that the amendments bifurcate trusts that are registered organizations and those that are not. A trust is a registered or- ganization when the trust is formed or organized by filing a record with the state. When collateral is held in a trust that is a registered organiza- tion, the financing statement must provide the trust’s name as reflected on the trust’s public organic record. The same rules that apply to regis- tered organizations, as described above, also apply to trusts that are registered organizations. When collateral is held in a trust that is not a registered organization, the financing statement must provide the trust’s name as indicated on the trust’s organizing document. If the trust is unnamed, then a financing statement must provide the settlor or testator’s name as the debtor’s name, and must also provide additional information sufficient to distinguish the trust from other trusts having one or more of the same settlors or testators, such as the date of the trust agreement. Whenever the collateral is held by a trust that is not a registered organization, the fi- nancing statement must also indicate that a trust holds the collateral. Perfection of After- Acquired Property • Debtor’s Location Change Many events can occur after prop- erly filing a financing statement that could render the financing statement ineffective. For example, a debtor may move to a different jurisdiction. Under the pre-amendment rules, a secured party had a four-month grace period to file a new financing state- ment in the debtor’s new jurisdiction to remain perfected. However, the grace period only applied to col- lateral in which the secured party’s interest was perfected at the time the debtor changed jurisdictions. This rule created problems when a party had a security interest in after- acquired property. A secured party had no grace period with respect to after-acquired property and needed to immediately file a new financing statement in the new jurisdiction to perfect its security interest in prop- erty acquired by the debtor after changing jurisdictions. The amendments resolve this problem by providing that a financ- ing statement filed before the debtor’s jurisdiction change effectively perfects a security interest in collateral the debtor owns at the time of the jurisdic- tion change and also in collateral the debtor acquires within four months af- ter its jurisdiction change. The secured party must file a financing statement in the debtor’s new jurisdiction to remain perfected past the four-month grace period. • New Debtor Another event that can render an otherwise proper financing statement ineffective is when a new debtor be- comes bound by an original debtor’s security agreement and the new debtor is located in a different jurisdiction. Thismay occur when one entitymerges into another entity. Under the pre- amendment rules, a secured party had a one-year grace period after the