Pub. 7 2012-2013 Issue 6

www.nebankers.org 24 Extraordinary Service for Extraordinary Members. W ITHTHEPASSAGEOFNEBRASKA LB 90 on April 14, 2011, Nebraska joined the first seven states to adopt vari- ous Amendments to Article 9 of the Uniform Commercial Code. At the time of this writing (February 2013), a version of the Amendments has been adopted in 26 states and Puerto Rico, with adoption measures pending in 14 other state legislatures thus far. The Amendments, while largely technical in nature, contain important provisions of which secured creditors should take note. The Amendments were designed to correct certain ambiguous features of the previous version of Article 9. Specifically, and perhaps most importantly, the Amend- ments clarify the documents on which secured creditors may safely rely to ensure that the debtor’s name listed on the UCC-1 Financing Statement is not “seriously misleading.” Un-amended Article 9 left signifi- cant discretion for secured creditors to decide what constituted a debtor’s “individual” name. While secured creditors have undoubtedly developed best business practices in their ef- forts to properly identify the debtor, Amended Article 9 seeks to eliminate much of the uncertainty inherent to that process. Nebraska’s version of Amended Article 9 provides that the name of an individual debtor is sufficiently identified if the secured creditor uses a debtor’s exact name as set forth on an unexpired state-issued driver’s license. If the state has issued more than one license to an individual debtor, then the secured creditor should use the license that was issued most recently. Finally, if an individual debtor does not have a state-issued, unexpired driver’s license, then the financing statement must provide the individual name of the debtor or the surname and first personal name of the debtor, as set forth on a birth certificate or other government-issued document. Other states may prescribe a different approach to deter- mine an individual debtor’s name. Secured creditors are urged to consult with counsel in the state where the debtor resides to ensure that they have properly fulfilled the local Article 9 requirements. Different rules apply to entity (i.e., non-individual) debtors. For “registered organizations” (which includes any entity formed under the laws of a state or the United States, as well as registered business trusts), the financing statement should set forth the debtor’s name that is listed on the most recent “public organic record” which the organization has filed with the Secretary of State. The term “public organic record” includes any publicly available filing that forms or organizes the entity, as well as any amendments to or restatements of the formative document. Importantly, Certificates of Good Standing are not “public organic records.” To be abso- lutely certain about the accuracy of an entity’s name for Article 9 purposes, the secured creditor must look to the most recently filed organizational documents, and should not rely on a Certificate of Good Standing. Creditors Take Note: UCC Article 9 Has Been Amended Matthew J. Kivett and Andrew R. Biehl , Walentine, O’Toole, McQuillan & Gordon, LLP