We filed a UCC-1 financing statement in July 2018, covering the assets of an LLC that changed its name on August 1, 2018. Do we need to file a UCC-3 financing statement amendment as to the debtor’s name to maintain our perfection date?

Your bank’s July 2018 financing statement remains effective to perfect a security interest in the assets acquired by the LLC before its name change and within fourth months thereafter. The UCC provides that your “financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading,” as in the case of a change in the debtor’s name.

However, your bank’s financing statement is not effective to perfect a security interest in the assets the LLC acquired more than four months after its name change (assuming that it was a “blanket” financing statement intended to cover assets acquired by the LLC in the future). It is possible for a creditor to maintain its perfection date by amending its financing statement within the four-month period after it became seriously misleading to correct the misleading information. Because the four-month period since the LLC changed its name has passed, we believe your bank would need to file a new UCC-1 financing statement to perfect its interest in the LLC’s assets acquired after the four-month period concluded.

For resources related to our guidance, please see:

UCC, 810 ILCS 5/9-507(b) (“Except as otherwise provided in subsection (c) and Section 9-508, a financing statement is not rendered ineffective if, after the financing statement is filed, the information provided in the financing statement becomes seriously misleading under Section 9-506.”)

UCC, 810 ILCS 5/9-506(b) (“Except as otherwise provided in subsection (c), a financing statement that fails sufficiently to provide the name of the debtor in accordance with Section 9-503(a) is seriously misleading.”)

UCC, 810 ILCS 5/9-503(a) (“A financing statement sufficiently provides the name of the debtor: . . . if the debtor is a registered organization . . . only if the financing statement provides the name that is stated to be the registered organization's name on the public organic record most recently filed with or issued or enacted by the registered organization's jurisdiction of organization which purports to state, amend, or restate the registered organization's name; . . .”)

UCC, 810 ILCS 5/9-507(c) (“If the name that a filed financing statement provides for a debtor becomes insufficient as the name of the debtor under Section 9-503(a) so that the financing statement becomes seriously misleading under Section 9-506:

(1) the financing statement is effective to perfect a security interest in collateral acquired by the debtor before, or within four months after, the filed financing statement becomes seriously misleading; and

(2) the financing statement is not effective to perfect a security interest in collateral acquired by the debtor more than four months after the filed financing statement becomes seriously misleading, unless an amendment to the financing statement which renders the financing statement not seriously misleading is filed within four months after the filed financing statement becomes seriously misleading.”)