In In re Global One Media1, the U.S. Bankruptcy Appellate Panel for the Ninth Circuit rejected a creditor’s attempt to perfect its security interest by filing UCC-1 financing statements in the state where the debtor, not the collateral, is located. The decision reinforces a longstanding Article 9 principle – for most personal property collateral, perfection is governed by the debtor’s location, not the location of the collateral.
Why This Case Still Matters
This case remains of particular importance to secured lenders, asset-based lenders, commercial finance companies, private credit providers and businesses that regularly take security interests in personal property. Although the decision was issued in 2025 and addresses a rule that has existed since the 2001 amendments to Article 9, the issue continues to arise in bankruptcy cases, often with significant consequences. In re Global One Media serves as a reminder that even an apparently technical filing mistake can leave a creditor unperfected and force it to compete as an unsecured creditor when a borrower becomes insolvent. As courts continue to enforce the debtor-location rule strictly, and as lenders and borrowers increasingly operate across multiple states, periodic reminders of this fundamental principle are worth revisiting.
Background
Before filing for bankruptcy, Global One Media obtained loans from Newtek Small Business Finance totaling $2.7 million. The loans were secured by Global One’s personal property located in Nevada and New Mexico. Attempting to perfect its security interest, Newtek filed UCC-1 financing statements with the Nevada and New Mexico secretaries of state. However, Newtek neglected to file a UCC-1 financing statement in Delaware, Global One’s state of incorporation.
In 2024, Global One filed for bankruptcy under chapter 11 in the U.S. Bankruptcy Court for the District of Nevada. Newtek filed a proof of claim in Global One’s bankruptcy case, asserting much of its claim was secured by personal property.
The Subchapter V bankruptcy trustee objected to portions of Newtek’s claim secured by personal property, alleging ineffective perfection of its security interest. The trustee argued that because Global One was incorporated in Delaware, it was located in Delaware. Newtek’s failure to file a UCC-1 in Delaware resulted in its security interest not being properly perfected.
In response, Newtek argued that a secured party perfects its security interest in personal property by filing its UCC-1 in the state where the personal property is located. Newtek relied on Section 9-301 of the Delaware UCC, which provides that local law governs the “effect of perfection” and the “priority of a security interest.”2
The Ninth Circuit’s Opinion
The Ninth Circuit ruled that although local law indeed governs the effect of and priority of perfection, local law does not govern perfection itself. The Ninth Circuit relied on the plain language of the statute as well as the 2001 amendments to Article 9. Under the plain language of Article 9, “perfection” and the “effect of perfection” are distinct concepts. Although Section 9-301 provides that New Mexico and Nevada law govern the effect of perfection, the statute provides that the law of the state where the debtor is located governs perfection itself.
This reading of the statute is also supported by decades of precedent following the 2001 amendments to Article 9. In those amendments, the UCC changed the focus of the UCC-1 filing location from the location of the collateral to the location of the debtor, which for a corporation is its state of incorporation. By requiring creditors to file all UCC-1 filings in the debtor-corporation’s state of incorporation, the drafters sought to simplify the filing process.
Because Newtek failed to file its UCC-1 in the debtor’s location, Delaware, its security interest in debtor’s personal property was not properly perfected. Thus, Newtek had to proceed as an unsecured creditor for much of its claim.
How Creditors Can Protect Themselves
To protect their security interest where it really matters – insolvency by the borrower – creditors should take care to file their UCC-1 financing statements in the proper jurisdiction. Under the 2001 amendments to Article 9, the proper jurisdiction is the debtor’s location. When a debtor is an organization, its location is its state of organization. Therefore, an organization’s creditor should ensure it is filing its UCC-1 financing statements in the debtor’s state of organization.
Although In re Global One Media involved a corporation’s debt, creditors should be familiar with where all types of debtors are “located” for UCC-1 filing purposes. UCC § 9-307 governs the debtor’s location:
- Individual debtors are located at their principal residence.
- Organizations not organized under state law with only one place of business are located at the principal place of business.
- Organizations not organized under state law with more than one place of business are located at the chief executive office.
Proper filing of UCC-1 statements can help you protect your business. If you have questions about the impact of this case or secured debt generally, please contact Brian Holland or your regular Lathrop GPM attorney.
*Carson Cargill, a Lathrop GPM Law Clerk, contributed significantly to this content.
1In re Glob. One Media, Inc., 667 B.R. 878 (B.A.P. 9th Cir. 2025).
2DEL. CODE ANN. tit. 6, § 9-301.