Secured Creditor Loses $1m Priority Claim to IRS Due to Error in Collateral Description

Secured creditors are accustomed to using generic terms (e.g., accounts, inventory, equipment, etc.) when preparing security agreements and UCC-1 financing statements. Those descriptions are usually quite satisfactory but there is one important exception to that rule that is often overlooked— and overlooking that exception proved to be a $1 million mistake in a recent case in Florida. In that case, Sunz Insurance Co. v. Payroll Management, Inc. et al., 2021 Bankr. L…