The debtor, Wastetech, LLC (Debtor), was a limited liability company organized under the laws of the State of Georgia in July 2016. The Debtor changed its name from NTC Waste Group, LLC, to Wastetech, LLC, and filed a Certificate of Amendment with the secretary of state of Georgia effecting that change in July 2017.
In 2017, the Debtor signed six purchase and sale future receivables agreements in favor of Silverline Services, Inc. (Silverline). The agreements purported to grant Silverline a security interest in “Certain future receivables sold by said business seller and purchased by Crown Funding Group, Inc., as buyer, pursuant to that certain purchase and sale of future receivables agreement between seller and purchaser dated 8/7/2017.” Silverline filed and recorded a financing statement in Coweta County, Georgia, in November 2017. The debtor identified on the financing statement was NTC Waste Group, LLC. Silverline did not file any financing statements in Georgia that listed the name “Wastetech LLC” or “Wastetech” as the debtor. A search of the Georgia Superior Court Clerks’
Cooperative Authority’s Lien records (GSCCCA) for the entity “Wastetech” or “Wastetech LLC” would not have disclosed the existence of the financing statement.
The Debtor filed for bankruptcy in February 2018. The bankruptcy trustee brought an adversary proceeding to invalidate Silverline’s financing statement and secured status because the Debtor’s name listed in the financing statement was inconsistent with its name on the public record as of the date of recording due to the name change occurring prior to the filing of the financing statement and because the description of the collateral in the financing statement did not adequately identify the collateral. The trustee moved for summary judgment on its claims.
PAUL BAISIER, U.S. BANKRUPTCY COURT JUDGE: Under the Official Code of Georgia Annotated, for a security interest in accounts receivable to be perfected, a financing statement must be filed. O.C.G.A. § 11-9-310(a)(2019). Furthermore, for a financing statement to be effective, the name of the debtor, among other things, must be provided. O.C.G.A. § 11-9-502(a)(1). With respect to a registered organization like the Debtor, the name of the debtor provided in the financing statement is sufficient only if it is consistent with the name of the debtor indicated on the public record of the debtor’s jurisdiction of organization.
O.C.G.A. § 11-9-503(a)(1). With a single exception, where a financing statement fails to sufficiently provide the name of the debtor, the financing statement is seriously misleading and as a result is ineffective. O.C.G.A. § 11-9-506(a)-(b). The single exception to this rule applies only in a scenario where “a search of the records of the filing office under the debtor’s correct name, using the filing office’s standard search logic” would disclose such financing statement. O.C.G.A. §
11-9-506(c).
Here, the Defendant filed the Financing Statement on November 14, 2017. The Debtor’s name on the Financing Statement is shown as NTC Waste Group, LLC. However, at the time of the filing, the Debtor’s correct name as shown on the public record was Wastetech, LLC. Therefore, the Debtor’s name on the Financing Statement is insufficient, unless the single exception (or safe harbor) applies. In this case, the single exception does not apply to the Financing Statement because a UCC index search of the Lien records of the GSCCCA using the correct name for the entity “Wastetech” or “Wastetech LLC” would not have disclosed the existence of the Financing Statement.
Having answered the first question regarding the effectiveness of the Financing Statement, this Court now turns to the second question—whether the perfection is also ineffective under Georgia law because the description of the collateral in the Financing Statement is inadequate.
Under Georgia law, another element of the sufficiency of a financing statement is that it must adequately describe the collateral covered by the financing statement. O.C.G.A. § 11-9-502(a)(3). A financing statement sufficiently indicates the collateral that it covers only if the financing statement provides either a description of the collateral pursuant to O.C.G.A. § 11-9-108 or an indication that the financing statement covers all assets or all personal property. O.C.G.A. §
11-9-504. Section 11-9-108 provides that a description of collateral “is sufficient, whether or not it is specific, if it reasonably identifies what is described.”
O.C.G.A. § 11-9-108(a). Examples of reasonable description include specific listing, category, and any other method that makes the identity of the collateral is objectively determinable. O.C.G.A. § 11-9-108(b).
Here, the description of the collateral contained in the Financing Statement is insufficient because it does not indicate that the collateral covers all assets or all personal property of the Debtor, nor does it meet the requirements under O.C.G.A. § 11-9-108 for a reasonable identification. Instead, the Financing Statement describes the collateral as “[c]ertain future receivables sold by said business seller and purchased by Crown Funding Group, Inc., as buyer, pursuant to that certain purchase and sale of future receivables agreement between seller and purchaser dated 8/7/2017 (the ‘agreement’).”
Had the description been “all future receivables of the Debtor,” it would have met the requirements under Section 11-9-108 by describing the collateral through category. It does not so provide, but instead endeavors to identify a more limited set of receivables. More specifically, the description points to “certain future receivables,” which is more specific than a general category.
Accordingly, a reasonable identification of the collateral calls for the identification of the receivables purchase agreement that defined the relevant accounts receivable. To identify that agreement, certain information may be relevant, including the date the agreement was entered into and the parties to that agreement.
Regarding the agreement date, according to the description in the Financing Statement, the agreement was dated August 7, 2017. However, none of the six Receivables Agreements on which the Defendant relies is dated on August 7, 2017. Consequently, that information in the Financing Statement would not help to identify the particular receivables in which the Financing Statement was intended to perfect an interest.
More critically, however, adequate information to identify the other party to the receivables purchasing agreement described in the Financing Statement is lacking. The counterparty to the receivables purchase agreement that should be consulted to describe the relevant receivables is identified in the Financing Statement as “Crown Funding Group, Inc.,” which is not the name of the Defendant or the name on any of the Receivables Agreements. Even if Crown Funding Group, Inc. could eventually be found and the discovery made that it shares an address with the Defendant as the purported secured party, those facts would not necessarily lead a third party to an agreement that was actually in the name of the Defendant and not Crown Funding Group, Inc., which is not the Defendant and apparently exists as a separate entity.
Given this collective ambiguity, the information in the Financing Statement fails to provide a “key” to the relevant agreement and thus the collateral’s identity.
Accordingly, this Court holds that the perfection of the security interest of the Defendant in Accounts Receivable of the Debtor is ineffective under Georgia law because the Financing Statement fails to provide a description of the collateral that reasonably identifies the collateral, i.e., the Debtor’s Accounts Receivable subject to the Defendant’s security interest.
The perfection of the Defendant’s security interest in Debtor’s Accounts Receivable granted under the Receivables Agreements is not properly perfected because neither of two elements required for perfection by Georgia law is met. Accordingly, the Financing Statement is seriously misleading, and perfection of the Defendant’s security interest in Debtor’s Accounts Receivable is legally ineffective. Based on the foregoing, 

CRITICAL THINKING:
What were the court’s reasons for determining that Silverline had failed to properly identify the debtor and describe the collateral in its financing statement? Did the court’s decision deprive Silverline of the benefit of its bargain with the debtor or was this the correct result given the noted deficiencies in the financing statement?
ETHICAL DECISION MAKING:
What conclusions do you reach when analyzing Silverline’s position from an ethical standpoint? Was Silverline acting in good faith to protect its legitimate rights to the collateral, a knowing effort to expand these rights beyond the reach of the financing statement, or a means by which to counteract the inadequate drafting of such document? What are the reasons for your conclusions?