Joe Hardy amp Jason Kemp LawyerPilots Bar Association CLE Program July 1216 2017 Savannah Georgia Aviation amp Space Attorneys wwwAviationSpaceLawcom National International Interstellar ID: 644063
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Slide1
Disastrous Myths in Aircraft Transactions
Joe Hardy & Jason Kemp
Lawyer-Pilots Bar Association CLE Program, July 12-16, 2017, Savannah, Georgia
Aviation & Space Attorneys
www.AviationSpaceLaw.com
National, International, InterstellarSlide2
When Myths Arise
Ownership / Operational StructurePurchase & SaleFinancingRegistrationSlide3
–Myth
“I’ve had my aircraft set up like this for years and nobody’s bothered me. So I have nothing to worry about.”Slide4
–Reality
The most catastrophic results (FAA fines in the $ millions; insurance denial; possible prison time) usually happen long after setting up structures. Slide5
–Solution
Initial planning to avoid the “Flight Department Company Trap.”
See G. Reigel’s Thursday presentation (separate sources for pilots & aircraft; FAR 91.501 exempt wet leases, etc.)Slide6
–Myth
“I’m taking delivery in Delaware, so I don’t have to worry about sales / use tax.”Slide7
–Reality
While some states have no, or low, sales tax for delivery, your home state may impose use tax.Slide8
–Solution
Advance
planning and implementationSlide9
–Myths
“The International Registry doesn’t apply to my purely U.S. transaction.”or
“The International Registry is optional.”Slide10
–Int’l Registry Realities
Applies if the buyer / debtor is in a Cape Town Convention signatory country. The U.S. is a signatory.
and
If you don’t register, your title or security interest can be primed. Slide11
–Solution
Determine whether the International Registry applies—to your purchase, security interest or lease—and use it if it does.Slide12
–Myth
“My FAA search came back clean so title is clear.”Slide13
–Reality
Many other interests can affect title:
International InterestsFederal Tax Liens
State/Local Tax LiensMechanics Liens
Even . . .
UCC-1s. Yes, really.Slide14
–Solution
Search where practical (FAA, Int’l Registry, UCC
); get title insurance for the rest.Slide15
–Myth
“Only a corporation can register an aircraft.”Slide16
–Reality
Partnership-IF each partner is an
individual U.S. citizenLLCs are fine, but need to file an LLC Statement with the FAANo publicly owned corporations or LLCsMust be a U.S. Citizen or fit an exemptionSlide17
–Myth
“Aircraft Purchase Agreements are all the same.”Slide18
–Reality
Highly negotiated:
InspectionDepositRemediesSlide19
Curious Points:
Indemnification
Choice of Law / ForumSlide20
Disastrous Myths in Aircraft Transactions
Joe Hardy & Jason Kemp
Lawyer-Pilots Bar Association CLE Program, July 12-16, 2017, Savannah, Georgia
Aviation & Space Attorneys
www.AviationSpaceLaw.com
National, International, Interstellar