Conflicting Instructions
If your vendor tells you to disregard the lien notice
A lien notice is not a request, and it is not your vendor’s to withdraw. These are the instructions account debtors most often receive, and what applies to each one.
What you may be toldWhat applies
The notice is a scam.
Verify it yourself on the state’s public UCC record, in most states at the Secretary of State, independently of us: the filing lists the secured party named on your notice, East Shore Equities or its filing representative. On request, we provide the Notice of Assignment your vendor signed when it entered into its agreement with us.
The matter has been resolved.
The payment direction remains in effect until the Maximum Amount is satisfied or East Shore Equities releases or modifies it in writing. A statement from your vendor is not a release. Ask your vendor for the written release and send it to us; we will confirm the status of the lien in writing.
Without a court order, you don’t have to do anything.
A lien notice does not come from a court and does not need one. Its effect comes directly from Section 9‑406(a) of the Uniform Commercial Code, in force in every state: once your company receives the notice, a payment to the vendor does not discharge your company’s obligation, and a payment to East Shore Equities does. No court order and no second notice are required.
Our contract with the vendor prohibits assignment.
Under Section 9‑406(d) of the Uniform Commercial Code, a term in your agreement with your vendor that prohibits or restricts assignment, or requires your consent to it, is generally ineffective.
Keep paying the vendor as usual.
After your company receives the notice, payment to the vendor does not discharge your company’s obligation to East Shore Equities, and your company may be required to pay the same amount again.
The notice only covers today’s invoice.
The payment direction covers amounts payable now and in the future, up to the Maximum Amount stated in your notice, and remains in effect until that amount is satisfied or East Shore Equities releases or modifies it in writing.
Your vendor says it will take responsibility.
A promise from your vendor to reimburse your company does not change your company’s obligation under Section 9‑406(a) of the Uniform Commercial Code. The vendor’s assurance is not a release and does not protect your company.
Just hold the payment until this is sorted out.
East Shore Equities does not object to a hold while your company verifies the notice; the Administrative Hold status below tells us so. The held amount is released only to the payee named in your notice, not to your vendor.
If I pay you, my vendor can’t keep operating.
Your vendor was paid for these receivables by East Shore Equities when it entered into its agreement. Under Section 9‑406(a) of the Uniform Commercial Code, a payment made to East Shore Equities discharges your company’s obligation to the vendor for that amount; the vendor cannot treat it as unpaid. Nothing in the notice asks your company to stop doing business with the vendor, and the notice does not change the terms of your arrangement with it.
