I would sue them immediately for breach of contract and as part of the discovery process I would obtain the names and addresses of the people that purchased the equipment subject to the UCC as you may have a right to get the equipment back. The buyers were under a duty to check for UCC filings at the secretary of states office before buying the secured collateral. You also may be able to sue the buyers for the value of the equipment.
Also if your debtor transfers equipment to a third party, your security interest stays with the equipment unless you consent to the transfer free of the security interest. The consent and release should be in writing.
However, if a third party is located in another state, your financing statement is in effect for whichever of the following time periods occurs first:
one year after the transfer and change in location, or
the original fi nancing statement lapses.
You should file a new UCC-1. If you fail to fi le a new UCC-1 in the new location within the time periods previously mentioned, your security interest is deemed unperfected and loses its effectiveness to any subsequent purchaser.
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