Knowing When to Walk Away
SCOKY Reverses ‘Secret Lien’ Holding!
by Guest Blogger
Worried about secret liens trumping your perfection? Imagine funding a loan under the assumption that you had a first-priority security interest in a debtor's assets to only have the government assert a secret lien over your collateral. The Kentucky Supreme Court, like courts in other states, recently recognized that the UCC Article 9 governmental entity exception should not be extended to situations where the governmental entity is the secured party. To calm your fears of about secret government liens, check out our colleague Rick Vance's most recent article.