Retail Relief: Amend the UCC to End the Filing Requirement to Perfect Consignment Interests

July/August 2018 ABF Journal

Stephen Selbst wrote an article for the ABF Journal, discussing struggles in the retail sector and the need to amend the Uniform Commercial Code for consignment interests. Following several high-profile Chapter 11 bankruptcy filings since 2016 including Toys “R” Us and Sports Authority, experts have learned that many retailers have been placing goods on consignment, but to perfect those goods, consignors are required to file with the UCC and give notice to other secured parties. However, Selbst explained that many consignors fail to follow the UCC procedure and end up as unsecured creditors if the retailer files for Chapter 11, which illustrates the need to change the law.