Last October we highlighted an important ruling issued in September 2019 by the Seventh Circuit in the bankruptcy proceeding of In re I80 Equipment, LLC.  The Circuit Court in that case reversed a decision from the lower bankruptcy court and held that, under Article 9 of the UCC, a financing statement sufficiently indicates collateral even though it contains no actual collateral description but rather incorporates a collateral description by reference to an unattached security agreement. In re I80 Equip., LLC, 938 F.3d 866, 871-72 (7th Cir. 2019).  We noted that this decision put the Seventh Circuit directly at odds with the First Circuit, which ruled to the contrary in January 2019 in the bankruptcy proceeding for Puerto Rico (In re Financial Oversight & Management Board).

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In a surprising development, on September 11, 2019 the Seventh Circuit Court of Appeals issued a ruling on appeal reversing a lower bankruptcy court decision and found that a UCC financing statement that contained no collateral information whatsoever, but simply cross-referenced a security agreement, sufficiently “indicated” the collateral for purposes of UCC Article 9. In so doing, it put itself directly at odds with a January 2019 decision by the U.S. Court of Appeals for the First Circuit (In re Financial Oversight & Management Board)” in connection with the insolvency proceeding for Puerto Rico.

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