Request By:
Mr. J. E. Easterday
District Manager
Mack Financial Corporation
P.O. Box 11209
Suite 122, 9041 Executive Park Drive
Knoxville, TN 37919
Opinion
Opinion By: Robert F. Stephens, Attorney General; By William S. Riley, Assistant Attorney General
In your recent letter, two questions are asked concerning the sufficiency of financial statements that can be filed as evidence of lien perfection to protect Mack's Corporation interest on a vehicle financed under the company's security agreement. These questions are as follows:
1. Does Form UCC-1 properly recorded in the county clerk's office in Kentucky provide sufficient evidence of lien perfection to protect Mack Financial Corporation's lien interest in a vehicle financed under a company security agreement?
2. In lieu of Form UCC-1 will a properly recorded copy of a security agreement accomplish the same purpose?
KRS 186.045 deals with financing statements affecting vehicles at the time of financing. Subsection (1) states that financing statements relating to vehicles required to be registered in Kentucky with the county clerk shall be filed in the office of the county clerk of the county in which the debtor resides or, if a debtor is a nonresident, in the office of the county clerk in which the vehicle is operated. Subsection (2) states that whenever a financing statement required by KRS Chapter 355 relating to any vehicle registered or required to be registered for use on the highway is presented to a county clerk for filing, the clerk shall immediately note the information required by the department, etc.
KRS 355.9-402 sets out the formal requisites of financing statements. It must be signed by the debtor and secured party; have an address of the secured party from which information concerning the security interest may be obtained; have the mailing address of the debtor; and contain a statement indicating the types or description of the items of collateral.
If the Form UCC-1 or security agreement of your firm contains the above information, it should be sufficient to protect the firm's interest in a vehicle financed under its financial security agreement.