UCC filings mean what they say, even if a secured party believes otherwise

Lawyers' Forum

By Faye B. Feinstein and Christopher Combest

Faye B. Feinstein and Christopher Combest are partners in, and Feinstein heads, the Chicago commercial bankruptcy, restructuring and creditors’ rights practice at Quarles & Brady LLP.

Posted November 13, 2014 2:37 PM

Article 9 of the Uniform Commercial Code, the United States Bankruptcy Code and contract law collided recently in the bankruptcy case of General Motors Corp., and the damage may cost GM’s lender as much as $1.5 billion — all from the accidental termination of a UCC-1 financing statement that neither GM nor its lender ever intended to release. Answering a certified question from the 2nd U.S. Circuit Court of Appeals, the Delaware Supreme Court held that a secured party who “reviews and knowingly …

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