Okla. Stat. tit. 12A § 1-9-706
Okla. Stat. tit. 12A, § 1-9-706
Oklahoma Code Comment
Revised section 9-706 deals with financing statements filed in the proper place under former law, but which is the wrong place under revised Article 9. Such may be continued by filing an Initial Financing Statement under revised Article 9, but not a continuation statement under former law (see section 9-705). The effective period of the new filing is that for a continuation under the old law if it was filed before revised Article 9 took effect, or the period determined under revised Article 9 if it is filed after the effective date. Section 9- 706(c) specifies what the new filing must contain, including a reference to the old filing.
Thus revised section 9-706 introduces the new concept that an Initial Financing Statement is what must be filed on or after July 1, 2001, in the newly correct filing office (rather than a continuation statement) in order to continue the effectiveness of a financing statement that was properly filed in a formerly correct (but now incorrect) filing office before July 1, 2001. Under revised section 9-519(f) , any record (other than an Initial Financing Statement) that is filed after June 30, 2001, must be retrievable "by the file number assigned to the initial financing statement to which the record relates"; and any search must retrieve not only the initial financing statement but also all subsequently filed documents related to it. If revised Article 9 changes what would be the correct filing office with respect to a debtor and its particular collateral, the records in the newly correct filing office will not automatically disclose the contents of a financing statement that is on file in the formerly correct office. For this reason, revised section 9-706 does not allow the newly correct filing office to accept a continuation statement, or amendment, or termination statement, with respect to an Initial Financing Statement that is not on file there. The filing of a new Initial Financing Statement in the newly correct filing office, containing all required items of information within its four corners and also cross-referencing the filing in the formerly correct office, is a necessary first step before any other filing can be made in the newly correct filing office.
The period of effectiveness of an Initial Financing Statement filed in a newly correct filing office on or after July 1, 2001, will be measured from its date of filing, and not (as would be true of a continuation statement) as an extension of the period of effectiveness of a previously filed financing statement in another jurisdiction. Thus, the end of the period of effectiveness of records on file in a newly correct filing office can always be determined by consulting only the documents on file in that office. Revised section 9- 706(b)(2) . However, priority may date from the earlier filing.
If a financing statement on file in a formerly correct filing office was still effective on July 1, 2001, and a new Initial Financing Statement (to continue the earlier filing) was filed in the newly correct filing office before July 1, 2001, referencing the filing in the formerly correct office, the beginning of the period of effectiveness of the financing statement in the newly correct office "tacks back" and extends to the earliest effective date of the filing in the formerly correct office. Revised section 9-705(b)(1) .
As provided in revised section 9-705(c)(2) , all filings in a formerly correct (but now incorrect) office will inevitably lapse, because the correct filing office has changed, and no more related filings (except a termination statement or correction statement) are permitted to be made there. Typically, a filing in a formerly correct office will expire five years after its original filing, plus any continuations filed before July 1, 2001, but not later than June 30, 2006. Thus, for this period after revised Article 9 takes effect a complete search must extend beyond the place of filing dictated by revised Article 9. See revised section 9-705(c)(2) . If an Initial Financing Statement is properly filed in the newly correct filing office before the filing in the formerly correct office lapses, the security interest originally created by filing in the old filing office continues to be effective under revised Article 9.
A perhaps unexpected outcome is that the original filing made in a formerly correct office will eventually and inevitably be expunged from that filing office's records (for lack of ability to file any continuation in that office after June 30, 2001), even while the security interest itself (which may have priority tacking back to the date of filing in the formerly correct office) remains perfected by proper filings made in the newly correct filing office. Where a secured party is concerned with establishing that the date of perfection of its security interest (for priority purposes) "tacks back" to a date of filing in a formerly correct office, that secured party may want to verify that it has adequate documentation of the filings in the formerly correct office before they lapse and are expunged from the public records.
In this regard, revised section 9-519(g) requires each filing office to retain in its index all records for at least one year after they lapse; and nonuniform revised section 9-710(c) and (d) requires each local-filing office in Oklahoma (a county filing office) to retain all pre-July 1, 2001, filings until at least July 1, 2008, and to respond to search requests regarding those records until that date.
Two other somewhat similar problems should be noted. First, under former section 9-403(2) a filing remained effective during an insolvency proceeding, such as a Chapter 11 bankruptcy, and the secured party had 60 days after termination of the proceeding to perfect any filing that otherwise lapsed during the proceeding. This provision was not carried over under revised Article 9 as filing offices often removed the elapsed filing during the proceeding and the secured party can obtain relief from the stay if needed in order to file notwithstanding the proceeding under Bankruptcy Code section 362(b)(3) . However, transition could result in a period of lapse. Nonetheless, revised section 9-709(a) should preserve priority as to the trustee and revised section 9-705(c) should provide a window to reperfect. In addition the Bankruptcy Code (at 11 U.S.C. section 108 ) may preserve the rule of old section 9-403(2) .
A second issue arises from Oklahoma's non-uniform amendment of former Article 9 to deal with oil and gas related collateral like equipment in section 9-402(5) and 9-403(7) , which treatment is not carried over to revised Article 9. As a result the place for filing and duration of filing will change, which could cause an ultimate loss of perfection after July 1, 2001, if the interest is already outstanding more than five years, as revised section 9-515(d) could be construed to preclude continuation. However, revised section 9-705 (c) should be interpreted to extend during the transition the normal lapse period of revised section 9-515 .
See also Oklahoma Comment to revised section 9-702 .