UCC Article 9 Security Interests: Changes in Missouri Law
Stephen F. Matthews
The last major update and revision nationwide of the Uniform Commercial Code (UCC) Article 9 was in l972. This substantial revision is the result of the combined efforts of the National Conference of Commissioners on Uniform State Laws and the American Law Institute, whose special drafting committee completed its work in l998. I believe the revised Article 9 has been adopted by all fifty states including the District of Columbia http://www.nccusl.org/nccusl/uniformact_factsheets/uniformacts-fs-ucca9.asp.
Article 9 governs the creation, perfection, priority and enforcement of security interests (referred to as chattel mortgages in pre-UCC times, before l962) in personal property and fixtures.
New financing statement filing rules:
Central filings only: Financing statements need only be filed centrally, except that local filings are required for extracted minerals, timber and fixture filings. In Missouri the central filing office is with the Secretary of State. The Recorders of Deeds local county offices will no longer be the place to file UCC filings, except for fixtures, standing timber, and as-extracted collateral.
Filings required in the state of the debtor’s location
Registered organizations like corporations and limited liability companies are deemed to be located in the statewhere they are incorporated
Unregistered organizations (such as general partnerships) are deemed to be located in the state in which the organization has its place of business (if it has more than one place of business, then the state where it has its chief executive office)
Individuals are deemed to be located in their state of residence
Content of filings:
Debtor’s legal name
Name of the secured party or its representative
Indicate the collateral covered by the financing statement
Fixtures and timber require more details.
States may require additional content (Missouri does), like the name of the organization, its mailing address, the jurisdiction of its registration, its ID number.
No debtor’s signature is necessary in a financing statement (to accommodate electronic filing), but there must be an “authentication.”
An “all asset” description is permitted in a financing statement, but it is not sufficient for the security agreement.
There are “safe harbor” forms in the statute which the filing office must accept.
· Purchase Money Security Interests (PMSI) in Livestock: Now under the revised Article 9, a PMSI lender financing livestock must notify earlier-filed parties, just as with inventory.
· Double-Debtor Situations (when collateral is either transferred to a new debtor or the original debtor merges with a third party): There is no duty to re-file under the name of the transferee, unless the transferee is located in another state (in which case the original filing will become ineffective as against the transferred collateral upon the expiration of one year following the transfer).
· Security interests perfected under the “old” Article 9 rules but unperfected under the Revised Article 9: This may happen where the location where the financing statement was filed is not the proper location under the revised Article 9, or when the description of the collateral is incorrect under the revised Article 9. In either case, the pre-July 1, 2001 UCC filing remains effective until the earlier of (1) the date it would normally lapse, or (2) June 30, 2006, on which date the secured party must take the appropriate action to comply with the revised Article 9 for that type of collateral and the debtor’s location.
· New fee schedule: The filing fee for initial financing statements, amendments, assignments, continuations and terminations are $17.00 plus $1.00 per page. Search requests are $27.00 plus $1.00 per page for copies.
Complicated Enough? These are just the highlights. There are many excellent sources of more in-depth discussion of these new changes. Here are some sources, but there are many others:
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Disclaimer: This information is intended as non-legal general information, and not to be relied upon as legal advice. Consult your attorney for the application of revised Article 9 to your unique situation.