Minimal Blanket, Maximum Comfort: Less Is More When Drafting "All Assets" UCC-1 Descriptions

The Second Circuit Court of Appeals sent a clear message to secured creditors with its recent decision, Ring v. First Niagara Bank, N.A. (In re Sterling United, Inc.),¹ that in the case of a collateral description in a financing statement for blanket liens covering all of a debtor's assets -- less is more. In the case, the secured party, First Niagara Bank, supplemented its "all assets" UCC-1 description with the phrase "including but not limited to, [all assets located at]", followed by a specific address where the collateral was located.² When the debtor later moved to a new location, this unnecessary additional phrase almost backfired on the secured party when a bankruptcy trustee moved to avoid the financing statement as a preference.³ The Court ultimately found after protracted litigation that the collateral description was sufficient, but First Niagara's experience serves as a reminder to creditors (and their attorneys) that a simple "all assets" UCC-1