Document Type
Article
Publication Date
2026
Abstract
Changes to federal bankruptcy law and Revised Uniform Commercial Code (UCC) Article 9 have reignited an important practical and doctrinal question: when a financing statement lapses during the pendency of a bankruptcy case, must a secured creditor file a continuation statement to preserve perfection, or is perfection determined at the date of the petition filing? Historically, creditors relied on either the freeze rule (freezing the perfection on the date of the bankruptcy petition filing) or explicit tolling provisions in UCC §9 403(2). However, two developments complicate the landscape: (1) federal bankruptcy law now expressly contemplates the filing of continuation statements during a bankruptcy, and (2) Revised Article 9 removed the explicit tolling provision that previously (in some jurisdictions) protected creditors.
Despite the advent of the Bankruptcy Reform Act and Section 9-515(c) and the passage of several years, a majority of courts continue to apply petition date analysis using the freeze rule to conclude that a senior secured party whose financing statements lapse post petition retains its perfected security interest as against a junior competing secured party. And some courts continue to use the freeze rule to resolve priority battles between secured parties and trustees. Courts continue to do so because they maintain the proposition that a creditor's rights are fixed on the date of the petition filing, notwithstanding that the bankruptcy laws no longer prevent a creditor from maintaining perfection throughout the pendency of the bankruptcy proceedings. They disregard the evolution of the law as manifested through the Bankruptcy Reform Act and Section 9 515(c) in favor of the longstanding application of entrenched bankruptcy law and policy as manifested through the freeze rule.
Publication Title
Stetson Business Law Review
Volume
5
First Page
298
Recommended Citation
Gibson, Willa E., "Why Does the Freeze Rule Still Persist in the 21st Century - Given the Existence of the Bankruptcy Reform Act of 1994 and Revised Article 9-515(c)?" (2026). Akron Law Faculty Publications. 498.
https://ideaexchange.uakron.edu/ua_law_publications/498