RICK L. KNUTH is the keeper of the Banking and Finance Law Spotlight Site.

Rick's practice focuses on assisting institutional and private lenders and borrowers in asset-based loan transactions, real estate financing, accounts receivable and inventory-based financing. He has over 30 years experience in loan documentation, mortgage and trust deed foreclosures, loan participations, credit opinion letters, workouts, and insolvency proceedings of all kinds. He counsels banks large and small in all aspects of their commercial credit relationships.

Look for postings by the other attorneys in our Commercial Lending and Banking Practice Group.

Keven M. Rowe (Group Leader)
Tom Berggren
Rick L. Knuth
Kyle V. Leishman
James W. Peters
Susan B. Peterson
Jacob Redd
George R. Sutton
Glen D. Watkins
Randon W. Wilson

Published Articles

"Fraudulent Checks- the 'Same Wrongdoer' Defense"
by Rick L. Knuth

Originally Published in Utah Banker Magazine Fall 2013.

Important Resources
UCC Financing Statements and Collateral Descriptions
Posted on Jan. 30, 2017

A recent case by the U.S. Court of Appeals for the Second Circuit underscores the desirability of an "all assets" collateral description in UCC financing statements.

In Ring v. First Niagara Bank, NS (In re Sterling United, Inc.), a Bank had made a secured loan, and filed a UCC-1 financing statement describing the collateral as "all assets of the debtor, including but not limited to, any and all equipment, fixtures, inventory . . . now owned or hereafter acquired by the Debtor and located at or relating to the operation of the premises at [old address]. . ."

Seven years after the financing statement was filed, the debtor moved and changed addresses. Within 90 days of the Debtor's bankruptcy, however, the Bank filed an amended financing statement describing the collateral as before, but with reference to the new address instead of the old address. The Debtor's bankruptcy trustee sought to set aside the Bank's security interest as being unperfected as a result of the Debtor's change of location. The Bank and the Trustee agreed that the financing statement filed within 90 days of the bankruptcy was ineffective because perfection would have been a voidable preference under 11 USC Section 547.

The Bank, however, argued that it still had a valid security interest before the amendment, since the original collateral description referred to "all assets, including but not limited to, . ." those assets located at the old address. The bankruptcy court ruled in favor of the Bank, the District Court affirmed, as did the Second Circuit. The Court of Appeals ruled in a summary order (alas, without precedential authority), that the financing statement's collateral description referenced "all assets" of the debtor, wherever they might be located, and were not limited by language from referring to the old address. The "geographic reference to the initial collateral indication was merely illustrative", the court observed.

The take-away is that a broad description of collateral in the financing statement is preferred to one that is too narrow and that can be tied to a particular business location or classification of collateral. In this case, the secured creditor’s perfection was saved by the use of the broad filing language, notwithstanding a description tied to an outdated address.

Banking and Finance Law
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Rick Knuth is a member of the American College of Mortgage Attorneys.

George Sutton was recognized in 2012 as Utah Attorney of the Year in Financial Services Regulation Law by Best Lawyers in America.

Rick Knuth was recognized in 2012 as Utah Attorney of the Year in Banking and FinanceLaw by Best Lawyers in America.

All eligible attorneys in this group are ranked AV Preeminent by Martindale-Hubbell.

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