Events subsequent to filing

     Events subsequent to the filing of a financing statement or other record (e.g. the debtor changes its name) may make the information contained in the record inaccurate, and the inaccuracy may mislead a searcher.  Other events may change the location in which a searcher would expect to find the record (e.g. the debtor moves to another state).  When such events occur, the communication between filer and searcher cannot take place unless the filer takes steps to correct the inaccuracy or refile in another location or unless the searcher undertakes an investigation that would reveal the facts as they existed at the time of the filing.   Should the burden of restoring communication rest on the secured party or on the searcher? 

     The answer depends upon the nature of the event.  Events subsequent to the filing of a record that are likely to interfere with the communication between filer and searcher are:

     1.  The debtor changes its name in such a way that a search under the debtor's new name using the standard search logic employed by the filing office will not reveal a record indexed under the debtor's previous name.

     2.  A debtor that is not a registered organization (e.g. an individual) moves from one jurisdiction to another.

     3.  A debtor that is not a registered organization becomes a registered organization.

     4.  A debtor that is a registered organization (typically, a corporation, a limited liability corporation, a limited partnership, or a limited liability partnership) changes the jurisdiction in which it is registered.

     5.  A debtor transfers collateral to another entity, either to an entity located in the same jurisdiction as the debtor or to an entity located in another jurisdiction, where the transferee does not become bound by the security agreement between the secured party and the debtor.  Contrast item 6 below.

     6.  A new debtor becomes bound by the security agreement between the secured party and the original debtor, such as by merger.  "New debtor" is a defined term.  See U.C.C. 9-102(a)(56), U.C.C. 9-203(d).  Contrast item 5 above.   

     We consider examples of these events and how Article 9 allocates the burden between filer and searcher in Problem.Events subsequent to filing.