Tag Archives: financing statements

Error in the Debtor’s Name Seriously Misleading

Error in the Debtor's Name Seriously MisleadingIs an error in the debtor name seriously misleading? In what appears to be a national trend, two more recent cases have affirmed that a slight error in the Debtor’s name seriously misleading in the age of computer search logic. Here are the cases.

In re John’s Bean Farm of Homestead, Inc., 378 B.R. 385 (Bkrtcy. S.D. Fla. 2007). the creditor filed a UCC- l financing statement with the Florida Secured Transaction Registry identifying the Debtor as “John Bean Farms, Inc.”, instead of the proper incorporation name, “John’s Bean Farm of Homestead , Inc.” When the Trustee searched the database using the Debtor’s correct name, the search yielded no match. The Trustee found the creditor’s financing statement only after striking “previous command” 60 times. The Trustee objected to the secured claim filed by the creditor, and was awarded summary judgment. The Court held that the initial search page displayed the result of applying Florida’s standard search logic. Further, even if what constituted a search result were more than the initial page display, there would be a reasonable limit to the search. The Court deemed this limit to be no more than one page “previous” and one page “next” from the initial result screen.

In a second case, In re Jim Ross Tires. Inc.. 379 B.R. 670 (Bkrtcy. S.D. Tex. 2007), the Court construed Texas law. The financing statement was filed by the creditor in the Debtor’s correct corporate name. However, it added the Debtor’s trade “or d/b/ a” name, which had expired and not been renewed. Judge Isgur found that the financing statement did not contain a proper statement of the Debtor ‘s name, and left the creditor unperfected. The Court reasoned that only exact matches would be returned from a computer search of the Secretary of State’s database , and including the d/b/ a in a financing statement would
inevitably have resulted in the failure of the financing statement to appear.

If you have questions about the validity of a financing statement an attorney can help you decide if an error in the debtor’s name seriously misleading to the bankruptcy court.

For more information about Bankruptcy and an error in the debtor’s name seriously misleading  – contact Cynthia Remboldt, at the Remboldt Law Firm at 404-348-4081. FREE consultations can be scheduled by calling 404-348-4081.  Evening and Weekend hours are available to meet with an attorney.  If bankruptcy turns out to be the best way to move forward considering your alternatives, goals and financial challenges, payment plans are available if you need them.