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Legal Memorandum: "All Assets" Financing Statements

Issue: Whether a UCC financing statement securing ‘all assets’ of a corporation creates a priority security interest in all assets at the time of the filing of the financing statement or in all after-acquired assets as well.

Area of Law: UCC & Secured Transactions
Keywords: All assets; Financing statement; After-acquired assets
Jurisdiction: Delaware, Wisconsin
Cited Cases: None
Cited Statutes: 6 Del. Code § 9-108(a); Wis. Stat. § 409.108(1); 6 Del. Code. § 9-108(c); Wis. Stat. § 409.108(3); 6 Del. Code § 9-204(a); Wis. Stat. § 409.204(1)
Date: 10/01/2012

Not only is an “all assets” financing statement legally defective under Delaware law, but it does not incorporate after-acquired assets unless the language of the statement so provides:

·         Except as otherwise provided in subsections (c), (d), and (e), a description of personal or real property is sufficient, whether or not it is specific, if it reasonably identifies what is described.  6 Del. Code § 9-108(a); Wis. Stat. § 409.108(1).

·         A description of collateral as “all the debtor’s assets” or “all the debtor’s personal property” or using words of similar import does not reasonably identify the collateral.   6 Del. Code. § 9-108(c); Wis. Stat. § 409.108(3).

·         Except as otherwise provided in subsection (b), a security agreement may create or provide for a security interest in after-acquired collateral.  6 Del. Code § 9-204(a); Wis. Stat. § 409.204(1).

No Delaware cases have been located illustrating this principles, but some may be available nationwide given the conformity in the UCC among the states. 

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