Also known as: termination statement · termination stmt · UCC termination statement
Written by attorneys · grounded in primary & secondary sources — see below
An amendment of a financing statement that indicates either that it is a termination statement or that the identified financing statement is no longer effective. Filing the termination statement causes the related financing statement to cease being effective except as otherwise provided in Section 9-510.
Tyrone Tran bought custom blinds on credit from Trailblazer Airlines secured by the goods. Trailblazer filed a financing statement covering the consumer goods. Tyrone paid the balance in full with no further commitments. When he demanded a termination statement to clear title for a condo sale, Trailblazer failed to cause the secured party of record to file one within the required period.
AEG Liquidation Trust held a perfected security interest in assets of Ahava Dairy and Lewis. An unknown party filed UCC-3 termination statements purporting to end those interests without authorization or knowledge of AEG. The statements listed the debtors as filers. AEG sued to challenge the filings and preserve its security interests.
Select any source to read its text and confirm it supports the definition.
A secured party must cause the secured party of record to file a termination statement when the financing statement covers consumer goods and there is no remaining secured obligation or commitment to give value. The duty also arises if the debtor never authorized the initial financing statement. Timing rules require filing within one month after the obligation ends or within twenty days after a signed demand, whichever is earlier.
Supporting sources
Upon filing, the financing statement to which the termination statement relates ceases to be effective. This clears the public record so that the collateral is no longer subject to the perfected security interest described in the financing statement.
Supporting sources
A debtor may file a termination statement when the secured party of record has failed to file or send one as required by Section 9-513(a) or (c). The debtor must be authorized to file and the statement must indicate that the debtor authorized it.
Supporting sources
A termination statement ends the effectiveness of the financing statement. An assignment amendment changes the secured party of record without terminating the financing statement or its priority date.
Supporting sources