Revised Article 9 of the Uniform Commercial Code placed greater responsibility on secured parties to use the correct debtor name when preparing financing statements. RA9 provides that a financing statement is effective only if recorded under the “correct name” of the debtor. A small safety net is provided to give effectiveness to financing statements recorded under the incorrect name of the debtor, but only if the filing is revealed by a search under the correct name of the debtor using the filing office standard search logic. This saving provision of RA9 is dependent upon the flexibility of filing office search logic, which is generally limited to the elimination of punctuation and common business endings contained in organization names.
The correct name of a debtor that is an organization may be determined by reviewing public records from the state registry where the debtor was created or organized. However, determining the correct name of a natural person may prove to be more difficult depending upon the individual’s adoption and usage of names.
How should UCC searchers determine the correct name(s) of an individual debtor when obtaining searches? They may review personal documents such as a birth certificate, driver’s license, or Social Security card. Bank and tax records may also help determine names that have been adopted and used by the individual.
However, as several recent bankruptcy decisions have demonstrated, courts may find that names other than the legal given name of an individual debtor are correct names for purposes of determining the effectiveness of filings. While it is unclear how courts may view nicknames such as Bubba, Bud or T.J., if it is known that the debtor uses such names it may be prudent to search under those names as well.