Financing Statement Collateral Descriptions That Indicate Collateral By Reference Are Permissible Under Article 9 Of The UCC

Recently in In Re: 180 Equipment, LLC, a case of first impression, the United States Court of Appeals for the Seventh Circuit determined that the Illinois version of Article 9 of the Uniform Commercial Code (Illinois UCC) does not require a financing statement to contain a specific description of secured collateral. Instead, the Illinois UCC allows a financing statement to indicate collateral by reference to the description in the underlying security agreement, provided the identity of such collateral is objectively determinable.

In 180 Equipment, LLC, 180 Equipment, LLC (the Debtor) granted a security interest to First Midwest Bank (the Lender) in substantially all the Debtor’s assets pursuant to a security agreement. The security agreement further set forth twenty-six (26) categories of collateral, including accounts, cash, equipment, instruments, goods, inventory and proceeds thereof. To perfect its interest, the Lender timely filed a financing statement that