Montana – In Thermal Supply, Inc. v. Big Sky Beef, LLC, DA 07-0057 (Montana Supreme Court), decided October 21, 2008, Thermal filed a financing statement in June 2001 and never filed a continuation statement. The Montana Supreme Court held that Thermal's failure to timely file a continuation statement caused the original financing statement to lapse in June 2006. The court rejected Thermal's argument that its initiation of a suit on its claimed security interest tolled or extended the period of effectiveness of the financing statement, pointing out that Revised Article 9 does not contain a tolling provision.
Virginia – In In re: The Holladay House, Inc., CA 3:08cv286 (U.S.D.C., E.D. Va.), decided October 21, 2008, Reid filed a financing statement that described the covered collateral as all inventory delivered to the debtor pursuant to a consignment agreement. The debtor sought authority to use cash collateral and Reid filed a challenge, claiming an interest in the cash collateral. The federal district court affirmed the bankruptcy court's ruling authorizing the use of the cash because it was non-consigned collateral. The court noted that the description of the collateral in Reid's financing statement would not put a third party on notice of any alleged security interests in collateral other than the inventory listed in the consignment agreement and accepting Reid's arguments would render the financing statement's description seriously misleading.