Opinion ID: 2771725
Heading Depth: 2
Heading Rank: 2

Heading: Prior Certification Opinion

Text: On appeal to this Court, the parties offered competing interpretations of UCC § 9‐509(d)(1), which provides that a UCC‐3 termination statement is effective only if “the secured party of record authorizes the filing.” JPMorgan reasoned that it cannot have “authorize[d] the filing” of the UCC‐3 that identified the Main Term Loan UCC‐1 for termination because JPMorgan neither intended to terminate the security interest nor instructed anyone else to do so on its behalf. In response, the Committee contended that focusing on the parties’ 7 goal misses the point. It interpreted UCC § 9‐509(d)(1) to require only that the secured lender authorize the act of filing a particular UCC‐3 termination statement, not that the lender subjectively intend to terminate the particular security interest identified for termination on that UCC‐3. The Committee further argued that even if JPMorgan never intentionally instructed anyone to terminate the Main Term Loan UCC‐1, JPMorgan did literally “authorize[] the filing”—even if mistakenly—of a UCC‐3 termination statement that had that effect. In our prior certification opinion we recognized that this appeal presents two closely related questions. First, what precisely must a secured lender of record authorize for a UCC‐3 termination statement to be effective: “Must the secured lender authorize the termination of the particular security interest that the UCC‐3 identifies for termination, or is it enough that the secured lender authorize the act of filing a UCC‐3 statement that has that effect?” In re Motors Liquidation Co., 755 F.3d at 84. Second, “[d]id JPMorgan grant to Mayer Brown the relevant authority—that is, alternatively, authority either to terminate the Main Term Loan UCC‐1 or to file the UCC‐3 statement that identified that interest for termination?” Id. 8 Recognizing that the first question—what is it that the UCC requires a secured lender to authorize—seemed likely to recur and presented a significant issue of Delaware state law, we certified to the Delaware Supreme Court the following question: Under UCC Article 9, as adopted into Delaware law by Del. Code Ann. tit. 6, art. 9, for a UCC‐3 termination statement to effectively extinguish the perfected nature of a UCC‐1 financing statement, is it enough that the secured lender review and knowingly approve for filing a UCC‐3 purporting to extinguish the perfected security interest, or must the secured lender intend to terminate the particular security interest that is listed on the UCC‐3? Id. at 86. The second question—whether JPMorgan granted the relevant authority—we reserved for ourselves, explaining that “[t]he Delaware Supreme Court’s clarification as to the sense in which a secured party of record must authorize a UCC‐3 filing will enable us to address . . . whether JPMorgan in fact provided that authorization.” Id. at 86–87.