Request By:
Ms. Bettie Armstrong
Deputy Clerk
Daviess County Clerk's Office
P.O. Box 389
Owensboro, Kentucky 42302-0389
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
You raise the question as to whether or not an original financing statement can be amended in order to change the name of the debtor.
The original financing statement is required to show, inter alia, the name and address of the debtor and the name and address of the secured party. In addition, the financing statement must be signed by the debtor and the secured party. KRS 355.9-402(1) and (4).
The debtor's name and address were shown on the original financing statement as "DSC, Inc., 1300 Industrial Drive, Owensboro, Kentucky 42301 and 704 Pride Avenue, Madisonville, Kentucky 42431." The amendment filed in your office indicates that the debtor's name and address is as follows: "Translectric Supply Company, 1300 Industrial Drive, Owensboro, Kentucky 42301 and 704 pride Avenue, Madisonville, Kentucky 42431."
We checked with the Kentucky Secretary of State's Office this morning. Their records indicate that amended Articles of Incorporation were filed in that office on June 20, 1983, indicating a change in the corporate name from "DSC, Inc." to "Translectric Supply Company", with addresses as above "(3) A filing which is made in the proper place in this state continues effective even though the debtor's residence or place of business or the location of the collateral or its use, whichever controlled the original filing, is thereafter changed."
KRS 355.9-402(5) provides:
"(5) The term 'financing statement' as used in this article means the original financing statement and any amendments but if any amendment adds collateral, it is effective as to the added collateral only from the filing date of the amendment."
Thus the "financing statement" is the original financing statement and any permissible amendments thereto. The 1972 official text of the Uniform Commercial Code as presented by the American Law Institute and the National Conference of Commissioners on Uniform State Laws, Official Text and Comments of Article 9, as relates to Article 9-402(7), provides in part that "Where the debtor so changes his name or in the case of an organization its name, identity or corporate structure that a filed financing statement becomes seriously misleading, the filing is not effective to pefect a security interest in collateral acquired by the debtor more than four months after the change, unless a new appropriate financing statement is filed before the expiration of that time." Subsection (7) also provides that "A filed financing statement remains effective with respect to collateral transferred by the debtor even though the secured party knows of or consents to the transfer." Here no additional collateral is involved. However, under Article 9-402(7), official 1972 text, the comment in the 1972 official text points out that out that the subsection does not undertake to state whether the old security agreement continues to operate between the secured party and the party surviving the corporate change of debtor.
KRS 355.9-402(5) permits amendments of the original financing statement, but establishes no definite items of restriction, thus suggesting that an amendment to a financing statement may amend any aspect of the statement, and may add new collateral. See Anderson, Uniform Commercial Code, Volume 4 (Second Ed.) § 9-402:36. Further, the Kentucky statutory law does not indicate whether amendment of a financing statement may only be done by filing a completely new statement.
It is our opinion that under the facts presented, and considering that the amendment to the original financing statement involves only the change in the corporate name of the debtor, no completely new financing statement is required to be filed. Your records indicate that the secured party is aware of the change in the corporate name of the debtor. Thus the profferred amendment to the original financing statement is sufficient. We believe this view is consistent with the legislative policy of the protection of any subsequent buyers or creditors of the property, and here the secured party was aware of the corporate name change. See
General Elec. Credit Corp. v. Fancher, Ky.App., 600 S.W.2d 472 (1978). See also In Re Kitthyawk Television Corp. (U.S.C.A. -6, 1975) 517 F.2d 24, in which the Sixth Circuit Court of Appeals held that the creditor had no obligation under the Uniform Commercial Code to even amend its financing statements to show that a minor change had been made in the corporate name of the debtor. In that case "Kittyhawk Broadcasting Corporation" became "Kittyhawk Television Corporation". Here the corporate name of "DSC, Inc." was changed to "Translectric Supply Company." The Sixth Circuit pointed out that the UCC seeks to protect against the "secret lien" , yet it also adheres to the concept of notice filing. The court said that, in this conflict between two policies, it concluded that the names of the debtor were sufficiently similar that a third party could reasonably be expected to be put on notice or at least to be required to make further inquiry. The court distinguished that situation from an intentional name change where the new name bears no resemblance to the old name of the debtor, as is the instant situation. In such case, the court said that it had held that the threat of a secret lien outweighs any additional burden on the secured party to amend its financing statement or to file the security agreement itself as a financing statement as the code permits.
The Supreme Court of Michigan, in Continental Oil v. Citizens Trust & Sav. Bank, 397 Mich. 203, 244 N.W.2d 243 (1976), wrote that whether a name is seriously misleading is significant because financing statements are indexed according to the debtor's name. However, the Michigan statutes did not require that a financing statement be amended or refiled when a debtor undergoes a subsequent name change. Thus the court pointed out that where the debtor's name change becomes seriously misleading, the filing is not effective to perfect a security in collateral acquired by the debtor more than four months after the change, unless a new appropriate financing statement is filed before the expiration of that time.
In
Borg-Warner Acceptance Corporation v. Bank of Marin, 36 Cal.App.3d 286, App., 111 Cal. Rptr. 361 (1973), the California Court pointed out that the purpose of filing a financing statement is to give an existing or prospective creditor the opportunity to inform himself of whether, and of the extent to which, an existing or prospective debtor has encumbered his assets and to govern himself accordingly in dealing with the debtor.
CONCLUSION
Under the facts, it is our opinion that the amendment of the original financing statement was proper. The amendment refers specifically to the original financing statement No. 81521, dated November 23, 1982.