In re: 180 Equipment, LLC

Bankruptcy Ct. erred in finding under Illinois’s version of Article 9 of U.C.C. that creditor’s financing statement failed to perfect security interest since it failed to contain separate and additional description of debtor’s collateral that was subject to said security interest. Record showed that debtor obtained commercial loan from creditor, and that parties executed security agreement that listed debtor’s asserts as collateral. Creditor thereafter filed financing statement with Ill. Secretary of State that purported to cover “all collateral” described in parties’ security agreement. While trustee argued that creditor’s security interest was not properly perfected because its financing statement did not independently describe underlying collateral, Ct. of Appeals found that Illinois’s version of Article 9 of U.C.C. allows party to “indicate” collateral in financing statement by pointing to or directing attention to description of that collateral in parties’ security agreement. As such, instant financing statement was sufficient to perfect creditor’s security interest in debtor’s assets, where security agreement contained detailed list of collateral, and where creditor may incorporate by reference its security agreement in financing statement under section 9-108.