UCC liens

[T’Boo Ted Marshall 2731]

I have a current client that is nearing closing on his asset sale but upon running a UCC check a couple have been found.

 

He’s called numerous times and been told there are no current balances but obviously can’t close his sale without a lien release and is sent to another department for the release. He then had to leave a VM. It’s been about a week with no responses.

 

Any suggestions?

 

[Incredulity 11646]

Have an attorney send a letter to the UCC filer(assuming bank).

It should be ordinary course to release the lien, but I would guess the lender isn't motivated and probably would claim to be behind on that work due to COVID.

[T’Boo Ted Marshall 2731]

So he left a voice mail and let it go for a week?  
When you run a UCC Search, does it not tell you the entity who filed the lien?

No, multiple parties have followed up with no response.

We only have one email address available but will try the atty letter.

[Incredulity 11646]

As a last resort, I think you could also have a document in the closing that acknowledges the Lein and agrees its the responsibility of the seller to remedy.

The buyer and seller would need to be very motivated to close without delay.  Obviously that is a fast and loose option.

[T’Boo Ted Marshall 2731]

Willing to do that but the assets are listed in the filings so that gives the buyer and their attorney pause.

[Incredulity 11646]

Also, I would assume there is a method to dispute a UCC filing with the Secretary of State.  Including a way to complain about the filers inaction to remove the lien.  A notice from the Secretary of State would almost certainly get a response.   I would imagine that is a long and painful process, but maybe worth researching.

[Incredulity 11646]

1 minute ago, Dr. Beeper said:

That should go over with the Buyer like a wet fart on silk panties. If a Seller tried to pull that on me, I’d tell them to get fucked. 

Hence, "last resort" and "fast and loose".

Just an idea and admittedly not the best.

[TwiceHorn 31436]

6 minutes ago, Incredulity said:

Also, I would assume there is a method to dispute a UCC filing with the Secretary of State.  Including a way to complain about the filers inaction to remove the lien.  A notice from the Secretary of State would almost certainly get a response.   I would imagine that is a long and painful process, but maybe worth researching.

There is not.

UCC filings are normally valid for five years from their filing date.  https://statutes.capitol.texas.gov/Docs/BC/htm/BC.9.htm Tex. Bus, & Com. Code 9.515

[Incredulity 11646]

Just now, TwiceHorn said:

There is not.

UCC filings are normally valid for five years from their filing date.  https://statutes.capitol.texas.gov/Docs/BC/htm/BC.9.htm Tex. Bus, & Com. Code 9.515

Interesting. 

 

[jeevsie 3733]

Hence wet fart and silk panties

[T’Boo Ted Marshall 2731]

Got a response from one. Looks like we can close and put them on the distribution statement.
Similar to what we’ve done with vehicle payoffs.

[troph 24781]

On 12/17/2020 at 3:16 PM, T’Boo Ted Marshall said:

Got a response from one. Looks like we can close and put them on the distribution statement.
Similar to what we’ve done with vehicle payoffs.

So money was owed?  If it’s truly not owed and your accounting team can confirm then check the legal docs on that loan a lot of times borrowers can self file a UCC-3 in customized/negotiated debt deals. Heck if the payment history is tight enough and the lender is no responsive I’d likely file anyway.  May not help on the eve of closing with a nervous nelly attorney.  Absolutely won’t work if a new lender is coming in. If you can’t provide back up to show it’s paid and you get no response then for a blanket lien that’s potentially large enough you’re kinda screwed unless the lender responds.  PMSIs and smaller balances you can escrow, holdback and indemnify around it.  

Edited December 19, 2020 by troph

[troph 24781]

On 12/17/2020 at 10:19 AM, Incredulity said:

As a last resort, I think you could also have a document in the closing that acknowledges the Lein and agrees its the responsibility of the seller to remedy.

The buyer and seller would need to be very motivated to close without delay.  Obviously that is a fast and loose option.

It’s actually not fast and loose if done correctly and the risk doesn’t cut and the whole of the business.  Again blanket liens would be a problem unless financial due diligence is assuring you it’s paid and the lender is a dipshit.  New lender won’t allow it either.  Most lawyers either (1) can’t take any risk or (2) don’t really know how to evaluate risk, but there are ways to take risks like this if the diligence is done and comes back favorable.
 

I mean as long as it doesn’t stink and she doesn’t soil her panties you’d still f-her right? Same idea. 

Edited December 19, 2020 by troph

[T’Boo Ted Marshall 2731]

We finally got them all to respond.
One sent over a lien release
Two are sending payoff with wiring instructions.
Now on to schedules. My personal favorite.

[troph 24781]

We finally got them all to respond.
One sent over a lien release
Two are sending payoff with wiring instructions.
Now on to schedules. My personal favorite.

Talk about a shit sandwich, schedules blow. Got off of that detail as quickly as I could.