## Facts

- Terrance Joseph Kinderknecht operated a farming business and was commonly known as “Terry.”
- Kinderknecht granted Deere and Company and Deere Credit Services, Inc. security interests in two farm implements.
- Deere filed UCC financing statements listing the debtor as “Terry J. Kinderknecht,” not his legal name, “Terrance Joseph Kinderknecht.”
- Kinderknecht filed a Chapter 7 bankruptcy petition under his legal name.
- The Chapter 7 trustee sued to avoid Deere’s liens under 11 U.S.C. § 544(a)(1), asserting the financing statements were not effective under Kansas Revised Article 9 because the debtor name was incorrect and “seriously misleading.”
- The bankruptcy court granted summary judgment for Deere, holding the nickname-based filings were sufficient to perfect.

## Issues

1. Under Kansas Revised Article 9, does a financing statement sufficiently provide an individual debtor’s name when it lists only a commonly used nickname rather than the debtor’s legal name?
2. If the debtor name is insufficient, are the filings “seriously misleading” and therefore ineffective to perfect, allowing a Chapter 7 trustee to avoid the security interests under 11 U.S.C. § 544(a)(1)?

## Decision

- The Bankruptcy Appellate Panel reversed the bankruptcy court.
- Kansas law requires a secured party to list an individual debtor by the debtor’s legal name; a nickname alone does not satisfy the debtor-name requirement.
- Because the financing statements used only “Terry J. Kinderknecht,” they did not provide the correct debtor name required by Kan. Stat. Ann. § 84-9-503(a)(5).
- The filings were “seriously misleading” and did not perfect Deere’s security interests.
- As a hypothetical lien creditor under § 544(a)(1), the trustee could avoid Deere’s unperfected security interests.

## Legal Principles

- Under Kan. Stat. Ann. § 84-9-503(a)(5), a financing statement for an individual debtor must provide the debtor’s individual (legal) name; trade names and similar variants are not enough when used alone.
- A financing statement that fails to sufficiently provide the debtor’s name is “seriously misleading” and generally ineffective to perfect, subject only to the limited statutory safe harbor tied to the filing office’s standard search logic.
- In bankruptcy, 11 U.S.C. § 544(a)(1) permits a Chapter 7 trustee, as a hypothetical judicial lien creditor as of the petition date, to avoid unperfected security interests.

## Conclusion

The appellate panel held that Kansas Revised Article 9 requires an individual debtor’s legal name on a financing statement; filings that use only a nickname are seriously misleading and ineffective to perfect, enabling a Chapter 7 trustee to avoid the resulting unperfected liens under § 544(a)(1).


Clark v. Deere & Co. (In re Kinderknecht), 308 B.R. 71 (B.A.P. 10th Cir. 2004)