Legal Issues — UCC
It’s a Bird… It’s a Plane… It’s a Super-Priority Purchase Money Security Interest
A PMSI is a useful arrow in the quiver of many equipment finance companies. Still, no legal weapons or tools are 100% effective. It is crucial, therefore, for a PMSI lender to have a good understanding of the requirements of a purchase money security interest and to maintain adequate records evidencing that those requirements have been met. Carefully drafted documents are a must.
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Resting Comfortably — The Four Paths to Perfection
The last edition of Dispatches From the Trenches discussed the Article 9 concept of attachment. In this edition, Ken Weinberg discusses the four primary ways in which an attached security interest may be perfected — filing, possession, control and automatic perfection.
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Property and Transactions Subject to Collateral Categories Under Article 9
The last edition of Dispatches From the Trenches generally discussed what kind of property and transactions are, and are not, subject to Article 9 of the Uniform Commercial Code (UCC). This edition provides more detail on the various, highly defined collateral categories created by Article 9.
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Describe Your Debtor Correctly or Lose Your Lien
Adventures in Perfection Land
Make no mistake, Andrew Alper warns, Perfection Land is not as perfect as the name suggests. In the following article, he provides clear direction and compelling case analysis aimed at helping lessors to avoid falling down a particularly expensive and time consuming rabbit hole.
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Defining a Security Interest?
Looking Outside the Comfortable Confines of Article 9
In Ken Weinberg’s estimation, Article 9 of the Uniform Commercial Code is an extremely thoughtful and thorough statute. But, he warns, it’s not the end all, be all of security interests, and it is therefore prudent to visit what is and what isn’t covered by Article 9’s broad scope.
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Proposed UCC Article Amendments That Will Impact Equipment Financing
With Article 9 provisions changing and inconsistencies among the codes of various jurisdictions, maintaining a secure position can be a complex responsibility. Bottom line, secure positions are the lifeblood to an equipment lessor and an understanding of changing regulation is critical to success.
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Verifying Debtor Names on UCC Financing Statements Can Mean the Difference Between Collecting a Debt or Going Home Empty-Handed
The current economic situation, and the resulting increase in charge-offs and delinquency rates, now has many lenders scrambling to re-examine their policies and practices regarding protection of the collateral securing such loans. Ensuring the correct debtor name is sourced and filed on a UCC Financing Statement is the beginning part of that process.
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A Little Something About Software Leasing & Finance
For many outside our industry, equipment leasing and finance is a niche with magical and confusing terminology and structures such as synthetic leases, operating leases, true leases, FMVs, TRACs, ALIASs and EFAs. When you add software leasing and finance into the mix, you encounter a niche within a niche. In the following article, Ken Weinberg briefly addresses some of the unique considerations raised by such software transactions.
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UCC Statutory Framework Can Benefit Funders
This edition of Dispatches From the Trenches analyses some of the statutory framework of the Uniform Commercial Code, which provides some comfort to funders willing to go blind … that is, don’t receive executed notices and Acknowledgments.
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Minnesota Court Applies Article 9 Commercial Reasonableness Standard to Article 2A Equipment Lease
Andrew Alper returns to discuss a recent case in which the Minnesota court drew from Article 9 commercial reasonable standards to justify its ruling in an Article 2A lease transaction when such requirements do not exist in Article 2A … not good news for lessors that don’t comply with Article 9 disposition agreements.
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An Update on Payment Intangibles & Case Law Regarding a Lessor’s Rights as an Additional Insured
This edition of Dispatches from the Trenches covers two areas: 1.) to provide an update regarding the holding of In re Commercial Money Center regarding payment intangibles, and 2.) analyze a recent case that may make you question your reliance on certain certificates of insurance.
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Implied Covenant of Good Faith & Fair Dealing
This issue discusses the implied duty of good faith and fair dealing often raised by aggrieved lessees complaining of lack of fairness or equity. Such claims are frequently heard simultaneously with claims of unfair and deceptive trade practices, unjust enrichment and unconsionability.
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Liens That Survive Transfer of the Equipment
This month, Ken Weinberg contemplates UCC provisions, which protect a lessee when it sells equipment leased pursuant to almost every type of lease under the sun as well as equipment finance agreements and loans secured by equipment.
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Revised Article 9: Refinancings, Consolidations & Renewals of Purchase-Money Security Interests
As markets continue to deteriorate in the months to come, it is going to be even more important to understand refinancings, renewals and consolidations of purchase-money security interests. This edition turns the spotlight on existing secured loans as they are refinanced.
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