In the Ninth Circuit Federal Court of Appeals decision in Chemical Bank v. Security Pacific National Bank, there is reference to an unreported bankruptcy court decision from the mid-1980's which suggested that only those entities listed as the secured party on a UCC-1 financing statement, have a perfected security interest despite any side collateral agency agreements. In that case, the lead lender properly filed UCC financing statements but the filing did not designate the secured party "as agent" and did not reference the colenders.
The filing was deemed to not be effective to perfect the lien in favor of the unidentified colender. While the decision is not binding precedent in New Jersey and is contrary to the weight of authority, when filing UCC financing statements on behalf of an agent lender, the practice of using "as agent" language on the financing statement is extremely important and, where practicable, the names of the colender should also be listed. A problem with listing all colenders is that there may be a large number and any change in the composition of the lending group could require amendment to the filed financing statements.
