Eleventh Circuit Finds Abbreviation in Debtor’s Name Not Found in Organic Documents Does Not Render Financing Statement Seriously Misleading

The following is an update analyzing a recent case of interest.


The Eleventh Circuit Court of Appeals (the Court) certified questions relating to Florida’s “safe harbor” provisions in its adoption of the Uniform Commercial Code (UCC) which could save a creditor from losing its secured interest if it filed a financing statement with an incorrect name for the debtor.  The questions pertained to the meaning of a “search of the records of the filing office” in the context of the search logic employed.  1944 Beach Boulevard, LLC v. Live Oak Banking Company (In re NRP Lease Holdings, LLC), 2021 WL 5865378 (11th Cir. Dec. 10, 2021).  To view the opinion, click here.


Debtor 1944 Beach Boulevard, LLC (Beach Boulevard) operates a family entertainment center in Jacksonville, Florida.  Beach Boulevard and its affiliates borrowed about $3 M from Live Oak Banking Company (Live Oak) by way of two SBA loans purportedly secured by a blanket lien on all of Beach Boulevard’s assets.  When Live Oak filed UCC-1s to perfect its security interest, it used the wrong name for the debtor, “1944 Beach Blvd, LLC,” rather than spelling out “Boulevard.”

In late 2019 Beach Boulevard and affiliates filed chapter 11 proceedings.  As debtor in possession, Beach Boulevard filed an adversary proceeding against Live Oak, asserting its rights under Bankruptcy Code § 544(a) as a hypothetical lien creditor to avoid any lien that was not properly perfected under state law on the petition date.  It asserted that the use of “Blvd” in the debtor’s name on the UCC-1’s meant the financing statements failed to comply with the requirements of Fla. Statute § 679.5021 (1) (UCC 9-502(a)) because it used the incorrect name for the debtor.  Section 679.5061 (1) allows for some minor errors in the UCC-1: such statement “is effective, even if it has minor errors or omissions, unless the errors or omissions make the financing statement seriously misleading.”  

Florida law expressly provides that “a financing statement that fails sufficiently to provide the name of the debtor in accordance with [Florida law] is seriously misleading” and ineffective to perfect a security interest.  § 679.5061 (2).  However, the Florida statute also provides a safe-harbor provision relating to the debtor’s name requirement:

    If a search of the records of the filing office under the debtor’s correct name, using the filing office’s standard search logic, if any, would disclose a financing statement that fails sufficiently to provide the name of the debtor in accordance with [the statute], the name provided does not make the financing statement seriously misleading.

    §679. 5061(3).

The parties to the adversary proceeding filed cross motions for summary judgment, arguing the law based on the undisputed fact that the name on the financing statement was inaccurate.  Live Oak’s evidence included declarations attesting that a search of the Registry under the debtor name “1944 Beach Boulevard, LLC” produced a result which revealed its filings on a “Previous” page from the first page of the search results which showed the closest 20 results.  On the first page of the search results, there is a “Previous” command tab and a “Next” command tab.  Above the command tabs there is a statement that advises the searcher to “[u]se the Previous and Next buttons to display additional results.”  Live Oak therefore asserted that its use of the wrong name was not seriously misleading because the search logic revealed the filings.

The bankruptcy court denied Beach Boulevard’s motion and granted summary judgment to Live Oak, concluding that its security interest was properly perfected under the safe harbor provision.  The district court affirmed without discussion.  Finding uncertainty in lower courts’ interpretation of the safe harbor provisions, the Court certified three related questions to the Florida Supreme Court.


The Court first noted that it is easy to find the correct name for a debtor.  The Florida Department of State’s Division of Corporations maintains an online index of the legal names of all entities authorized to transact business in Florida.  By using an easily accessible website, a creditor can confirm the correct name.  When the name is incorrect, then the safe harbor provision defines when the wrong name is seriously misleading.  As the Court stated” “[l]ooking at the plain language of section 679.5061, the rule is clear: a financing statement with the debtor’s incorrect legal name is effective only if a search of the Registry using the debtor’s correct name and the Registry’s standard search logic produces that financing statement.”  This provision put the burden on the filing creditor to include the debtor’s correct legal name.  Here, the real question posed is whether the financing statements must appear on the first page with 20 entries or whether the other statements listed when the Previous and Next tabs are clicked should be consulted.

These provisions had been addressed by two bankruptcy court decisions in Florida which had reached differing results.  One court held that the search was limited to the first page even though clicking “Next” would have shown the statements in question.  To the contrary, the other found a perfected security interest where the financing statement was revealed when the “Previous” button was clicked.

The Court concluded that the appeal depended upon the meaning of “search” in the statutory phrase “a search of the records…using the filing office’s standard search logic.”  Was the search satisfied by only the first page with 20 listings or must other pages be consulted?  Since this was a question unique to Florida law, the Court certified to its Supreme Court whether the search “is limited to or otherwise satisfied by the initial page of 20 names displayed to the user of the Florida Secured Transaction Registry’s search function” and, if not, whether the user must browse all names in the database, using the command tabs, with or without any limitations on how far the user must go. 

Author’s Comments:

As noted by the Court here, interpretation of the word “search” may differ from state to state, as the search logic employed varies widely.  Even though the words of the UCC are the same as adopted by most states, deciding which incorrect name is “close enough” to not be seriously misleading will not be uniform.  However, the practice lesson is simple.  Every state maintains a database, with its Secretary of State or equivalent State Department, which gives the current correct legal name of entities qualified to do business in the state.  Errors can be easily avoided by consulting that database before filing any UCC-1. Then the meaning of “search’ need not be explored.

The Commercial Finance Newsletter is written by an ad hoc group of the California Lawyers Association (CLA) Business Law Section.  This review was written by the Hon. Meredith Jury (U.S. Bankruptcy Judge, CD CA, ret.) a member of the ad hoc group.  Any opinions expressed herein are solely those of the author.  Thomson Reuters holds the copyright to these materials and has permitted the Commercial Transactions Committee to reprint them. This material may not be further transmitted without the consent of Thomson Reuters.

This ebulletin was prepared by Walter K. Oetzell, Walter K. Oetzell, APC, wkoetzell@oetzelllaw.com.

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