A transition issue under revised Article 9 of the Uniform Commercial Code may require special attention by our lender clients who make secured loans.
Revised Article 9, of course, went into effect in 46 states and the District of Columbia on July 1, 2001, and went into effect in the remaining states by January 1, 2002. Under the transition rules of revised Article 9, June 30, 2006, is an important date. That date is the outside date on which the effectiveness of financing statements filed under former Article 9 will lapse unless their effectiveness has been continued under the transition rules of revised Article 9.
This June 30, 2006, cut-off date for former Article 9 financing statements, created by revised UCC Section 9-705(c)(2), works very smoothly except for one scenario. That scenario is where a financing statement was originally filed in the second half of 1996 (or filed five or more years earlier and continued for a new five-year period beginning in the second half of
