In this second and last part of this series (click here for Part 1) we discuss the changes to Article 9 (Secured Transactions) of the Uniform Commercial Code of the State of New York (the “NYUCC”), as recently amended by Chapter 505 of the New York Assembly Session Laws of 2014 (the “Act”) and the pitfalls to beware of given differences between the NYUCC, as amended, and those recommended amendments by the National Commissioners on Uniform State Laws (“NCCUSL”) and the American Law Institute (“ALI”). NYUCC Article 9 (Secured Transactions) As revised, Article 9 prescribes new requirements for NYUCC financing statements with respect to individual debtors, certain business trusts, decedent’s estates and trusts. The most important concern that arises for creditors is whether the Act invalidates filed financing statements naming individual debtors. This is because the Act fails to adopt the detailed set of transition rules contained in the 2010 amendments (the “proposed amendments”) promulgated by NCCUSL and ALI. As a result, debtors and creditors should be aware of the new provisions as they may need to:
- revise their forms of UCC-1 statement and procedures for NYUCC filings;
- amend pre-existing UCC-1 financing statements;
- revise collateral documentation; and
- understand how the differences between the NYUCC as revised and the Uniform Commercial Code as in effect in other states can impact the creation and perfection of security interests when the governing law is not that of the NYUCC.
- through an agent;
- by the acknowledgement that a party already in control holds for its benefit;
- by listing its name on the account; or
- by indicating in the name on the account that she holds a security interest.