## Facts

- Harvey Goldman & Company (Debtor) was a Michigan corporation; its articles of incorporation listed the corporate name as “Harvey Goldman & Company.”
- Debtor also filed a certificate of assumed name in Michigan stating it did business as “Worldwide Equipment Company.”
- The Abraham and Geraldine Pasternak Irrevocable Living Trust (Pasternak) claimed a security interest in certain of Debtor’s collateral.
- To perfect, Pasternak filed a UCC financing statement with the Michigan Secretary of State identifying the debtor as “World Wide Equipment Co.” rather than “Harvey Goldman & Company.”
- Debtor later filed a Chapter 7 bankruptcy case, and Stuart A. Gold was appointed Chapter 7 trustee (Trustee).
- Trustee filed an adversary proceeding seeking a determination that Pasternak’s financing statement failed to perfect any security interest because it did not use Debtor’s registered corporate name as required by Michigan’s version of UCC Article 9.
- Evidence showed that a search of Michigan’s UCC index under the correct corporate name, using the filing office’s standard search logic, did not disclose Pasternak’s financing statement.
- The parties filed cross-motions for summary judgment on whether the financing statement was effective to perfect and, if not, whether Trustee could avoid the interest under 11 U.S.C. § 544(a).

## Issues

1. Whether, under Michigan’s enactment of UCC § 9-503, a financing statement sufficiently provides the name of a corporate debtor (a registered organization) when it lists only an assumed-name variant (“World Wide Equipment Co.”) instead of the debtor’s registered name (“Harvey Goldman & Company”).
2. Whether the debtor-name error was “seriously misleading” under Michigan’s UCC § 9-506 when a standard-search-logic search under the correct registered name did not reveal the filing.
3. If the financing statement did not perfect Pasternak’s security interest, whether the Chapter 7 trustee could avoid the unperfected interest under 11 U.S.C. § 544(a).

## Decision

- The court granted summary judgment for Trustee and denied Pasternak’s cross-motion.
- The court held the financing statement was ineffective because it did not provide the debtor’s name as shown on the public record of the debtor’s jurisdiction of organization (the registered corporate name).
- The court held the use of “World Wide Equipment Co.” was seriously misleading and was not saved by the UCC § 9-506(c) safe harbor because a standard-search-logic search under “Harvey Goldman & Company” did not disclose the filing.
- Because Pasternak’s security interest was unperfected as of the petition date, Trustee could avoid it under 11 U.S.C. § 544(a).

## Legal Principles

- For a debtor that is a registered organization, a financing statement is sufficient only if it provides the debtor’s name as indicated on the public organic record of the debtor’s jurisdiction of organization (UCC § 9-503(a)(1), as enacted in Michigan).
- A financing statement that provides only a trade name or assumed name does not sufficiently provide the debtor’s name for purposes of Article 9 perfection (UCC § 9-503(c)).
- A financing statement with errors remains effective only if the errors are not “seriously misleading” (UCC § 9-506(a)).
- A debtor-name error is not “seriously misleading” only if a search under the debtor’s correct name, using the filing office’s standard search logic, would disclose the financing statement (UCC § 9-506(c)).
- In bankruptcy, if state law deems a security interest unperfected on the petition date, the Chapter 7 trustee, as a hypothetical lien creditor, may avoid the interest under 11 U.S.C. § 544(a).

## Conclusion

Gold v. Pasternak holds that, for a Michigan corporate debtor, a UCC-1 must state the debtor’s registered organizational name, not an assumed-name variant; because the “World Wide Equipment Co.” filing did not appear on a standard-search-logic search under “Harvey Goldman & Company,” it was seriously misleading, left the interest unperfected, and allowed the Chapter 7 trustee to avoid it under § 544(a).


Gold v. Pasternak (In re Harvey Goldman & Co.), 455 B.R. 621 (2011)