Uniform Commercial Code Article 9 Filing Procedures for Railroad, Utility, and Other Corporate Debtors: Some Suggestions

After a brief discussion of the provisions of Article 9 peculiarly applicable to the long-term mortgage, a portion of this comment will review the relevant statutes and case authority in force prior to the effective date of the Code in various states and still applicable in others. More specifically, it will examine the special treatment accorded certain types of corporate indentures, particularly those securing the debt of railroads and other public utilities. Second, an attempt will be made to explain the probable solutions to the problems raised by the filing requirements of Article 9 as promulgated in each jurisdiction and as applicable to the various forms of package mortgages. Also, there will be discussion throughout of the almost prohibitive burden placed upon the mortgagor in certain of these agreements, for it is his duty under the typical language therein to comply with the local filing requirements in order to avoid default. This problem presented by Article 9 is also of concern to the trustee, who is equally desirous of avoiding default and its concomitant extensive and costly negotiation and litigation which does not otherwise arise except in bankruptcy. Finally, there will be examined amendments to Article 9 adopted by certain states in an effort to remedy the problems caused for the package mortgage by the Code’s filing requirements.