In the below excerpt from the article, “Expert’s Corner: Court Seeks to Clarify Meaning of Authorization to File a UCC Termination Statement,” as published on CSCTransactionwatch.com, Paul Hodnefield, Esq. delves into a series of court cases, specifically related to the bankruptcy of General Motors Corporation that have raised questions as to the authorization to file UCC termination statements.
“A termination statement’s effectiveness does not depend on the identity of the party that filed the record. Rather, it depends on whether the filing was authorized by the proper party. The general rule is that the secured party of record must authorize the filing of a termination statement. The UCC does not address what constitutes authority to file a record. That is left to law other than Article 9, typically the state law of agency. But what exactly must the secured party “authorize” for the termination statement to be effective?”