Premiere of Plane Talk Radio

By Stewart Lapayowker | October 13, 2010
Just a reminder to join us for the premiere of PlaneTalkRadio on October 14, 2010 at 12:30pm Eastern, hosted by Stewart Lapayowker! Read More

Stewart Lapayowker selected for inclusion in 2011 edition of The Best Lawyers in America

By Stewart Lapayowker | August 16, 2010

Stewart Lapayowker was selected for inclusion in the 2011 edition of The Best Lawyers in America the areas of Corporate Law and Transportation Law.

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Go for the "Fizzle"

By Stewart Lapayowker | June 30, 2010

What should you look for in a good, successful, closing?  Strangely, a fizzle.  That’s right, a fizzle.

Those familiar with aircraft transactions know that the consummation of an aircraft purchase or sale occurs typically on a conference call with all relevant parties on the call with an escrow agent, a title company or local FAA counsel in Oklahoma City.  There are typically several weeks of work that have gone into the offer to purchase, the purchase agreement, the pre-purchase inspection, the buyer’s structuring of its operations to comply with FAA regulations, minimize state tax implications and maximize federal tax benefits, the preparation of conveyance documents, dry leases (if applicable) and other operational matters.

So, what should happen on the closing call in order for the closing to be considered successful?  Nothing. Absolutely nothing.  If the parties have open issues to resolve, the closing call is not the place for it.  The buyer’s and seller’s representatives should poll their respective sides to confirm that there are no open issues.  If there are, just don’t schedule the call.  The closing call has so many different people on the line, with sometimes differing agendas (and egos), that a small issue can become a war of wills.

Have a checklist, run through it several times before scheduling the closing call, and be sure that your counterpart is on the same page.  Only then should one schedule the closing call.

So what happens if issues are raised on the call, interrupting the flow?  Simple.  Adjourn the call or give the relevant parties the time to speak offline and resolve the issue.  Avoid doing it on the closing call unless you are absolutely sure of how the other party will react.

If the only voice you hear on the call is that of the escrow agent or local FAA counsel running through the documents in escrow, a description of the documents in escrow and confirmation that funds are sufficient, and nothing else  happens on the call other than the sound of  the grunting of the parties approving release of documents and funds, then in my view you have just experienced a successful  closing.

Go for the fizzle!  Success will be evident when  everyone’s patting themselves on the back for the great job they’ve done (after the FAA filing time is available).


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Proper Planning for Aircraft Acquisition

By Lapayowker Jet Counsel | May 28, 2010

When considering the purchase or lease of an aircraft for personal or business travel needs, companies need to carefully examine their proposed expectations in aircraft use. This is essential because they will need to accurately estimate the anticipated tax and regulatory costs and will wish to determine how to best structure the ownership of the aircraft for its desired use.

Many prospective aircraft owners do not properly appreciate the regulatory dilemma they are entering into with the purchase and subsequent use of an aircraft. Potential purchasers must consider all of the involved parties, acknowledging that the Internal Revenue Code and federal tax issues, state tax laws, and the Federal Aviation Administration all impose rules that impact the potential use of the aircraft. It can be difficult to balance the uncoordinated and often competing requirements of taxing authorities, which exists at both the federal and state levels. In addition, the FAA complicates both the tax analysis and the structuring of private aircraft transactions.

Companies considering purchasing corporate aircraft should consider the following issues before proceeding with the acquisition:
Companies looking to require an aircraft should document why the company needs to purchase its own aircraft. To help decide what class of aircraft the company should buy, a travel profile should be developed that includes the number of passengers, average trip length and amount of baggage. This will help companies decide just what type of aircraft to purchase, so that their travel needs can be met.

Another critical decision that should be made is whether to set up a separate entity to acquire the aircraft. If this is a decision you decide to make, you should be careful not to violate the FAA rules that carrying company officials on a company aircraft must be incidental to the entity’s business.

Each state has its own sales and use taxes for aircraft. Companies should carefully research the relevant taxes and not depend solely on the seller’s advice. In fact, companies may wish to hire an aircraft tax specialist to do this research for them.
If corporate aircraft owners don’t address these important issues, it could lead to lost tax deductions, penalties and interest. This, though, may be the least of their problems. If an accident or other incident occurs involving the aircraft, job losses and unnecessary liability could result from the failure to follow aircraft regulations.

Lapayowker Jet Counsel, P.A.. is an aviation transaction lawyer focusing on airplane and jet transactions. To learn more, visit

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Understanding Airworthiness Certificates

By Lapayowker Jet Counsel | May 28, 2010

When acquiring a corporate aircraft, buyers must be aware of the various requirements that will be necessary to complete the purchase and make use of the aircraft. Under FAA guidelines, an aircraft may not operate in flight without a Certificate of Airworthiness.

In the past, most corporate aircraft sold and purchased in the U.S. was between U.S. companies. As a result, it was unusual for a company to purchase an aircraft that was not registered in the United States. In recent years, we have seen an increase in the number of new and used corporate jet aircraft being sold to buyers outside the United States. As the number of used corporate aircraft from the U.S. to other parts of the world increases, and as manufacturers deliver greater numbers of new aircraft to buyers outside the U.S., the percentage of aircraft that are non-U.S. registered has greatly increased. When purchasing a corporate aircraft, this is something that U.S. buyers should be wary of. Perhaps the most significant concern is to be certain that the aircraft will qualify for a U.S. Certificate of Airworthiness.

An Airworthiness Certificate is an FAA document which grants authorization to operate an aircraft in flight. There are two different classifications of FAA Airworthiness Certificates: Standard Airworthiness Certificate and Special Airworthiness Certificate.
The FAA may issue an applicant an Airworthiness Certificate when:

Registered owner or operator/agent registers the aircraft,

Applicant submits the application to the local FAA office, and

FAA determines the aircraft is eligible and is in a condition of safe operation

A Standard Airworthiness Certificate has no set expiration dates and will remain valid for as long as the aircraft meets its approved type design, is in a condition for safe operation and maintenance, and all preventive maintenance and alterations are performed in accordance with a country’s aviation regulations. However, if an aircraft is not maintained in accordance with regulatory requirements of the United States, the Certificate will be considered “not in effect” and the aircraft will have no flight authority. Once this designation has been made, flight authority will only be reinstated when the required maintenance is completed and then documented in the aircraft’s technical log books.

Certificates of airworthiness, once they are awarded, must be kept on board the aircraft by the operator and must be presented to aviation authorities whenever they are requested. Failure to do so may result in legal action.

Lapayowker Jet Counsel, P.A.. is an aviation attorney and aviation transaction lawyer, focusing on airplane and jet transactions. To learn more, visit

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Registrations of Aircraft under Non-Citizen Owner Trusts Resumes

By Stewart Lapayowker | May 14, 2010

Yesterday,  FAA Chief Counsel David Grizzle distributed the attached letter.  FAA Letter. In summary, he is instructing FAA Aeronautical Counsel’s office and the registry to proceed with non-citizen trust registrations consistent with past practice.  While the FAA is reviewing their issues of concern, the FAA is committing to involve industry in the process and, if the rules will be changed, the formal Notice of Proposed Rule Making process will be used.

This is a welcome result.  However, I can’t help but think that the FAA’s precipitous actions over the last 10 days has eroded the confidence of non-citizens in the FAA and the stability of US registration.

Regards, SHL.

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FAA Halts Non-U.S. Citizen Owner Trust Registrations

By Stewart Lapayowker | May 7, 2010

Yesterday, the FAA Aeronautical Counsel Center’s office halted approval of non-citizen owner trusts and directed the FAA examiners office to cease processing registration of aircraft by those trusts.   Industry participants are attempting to enter into a meaningful dialogue on the matter.   There has not as yet been any clarification as to whether the FAA’s position will be applied retroactively.

Owner trusts are commonly used by non-U.S. citizens to register aircraft with the FAA.  Basically, a non-U.S. company enters into a trust agreement with a financial institution that is a U.S. citizen. The trustee (referred to as an “owner trustee”) then acquires and registers the aircraft in its name as owner trustee.  It then typically will provide the aircraft to the beneficial owner through a lease or operating agreement.  The FAA has approved thousands of these types of trusts over the years.

The FAA’s action has the potential to impact pending transactions, sales by manufacturers of new aircraft, sales of pre-owned aircraft to foreign buyers, among others.

We will continue to monitor the situation.

Regards. SHL.

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Corporate Aircraft Deals Are Getting Done

By Stewart Lapayowker | April 29, 2010

This month we handled a transaction what we have affectionately referred to as the “Triple Lindy.”  You may recall Rodney Dangerfield’s movie Back to School.  In the movie, Rodney stuns the diving  competition when he dives from the diving board on to another and then on to a third, and wins the diving meet.  The transaction we handled involved the purchase by our client of 3 aircraft owned by 3 different parties and the simultaneous trade of the 3 aircraft through our client to the parties, including de-registrations and re-registrations in the U.S.   Two of the aircraft were registered in  countries other than the U.S. and the parties were on 5 continents.   The point is that deals are being done, and foreign buyers are taking advantage of pricing on large aircraft.    Attached is a press release with further information of interest. 4-28-2010 dBusinessNews We thank  Jack Prewitt & Associates, Inc. for permitting us to announce the deal on our blog.

Regards. SHL.

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The Importance of a Letter of Intent When Purchasing a Corporate Aircraft

By Lapayowker Jet Counsel | April 11, 2010

When purchasing a corporate aircraft, there are several important steps that must be taken after a buying team has been established. First among these important steps is the creation of a Letter of Intent (LOI). The buyer and seller should work closely together to negotiate and sign the LOI for the aircraft’s purchase.

While a LOI is a small document, it is essential because it helps guide the transaction. Without a LOI, the parties will lack the appropriate direction to move forward with the purchase and may have differing expectations. Furthermore, they may get bogged down in the Aircraft Purchase Agreement (APA) details, and this might delay the transaction or even prevent it from occurring at all.

A Letter of Intent should cover the following:

• Contain a description of exactly what is being purchased. This should include the make, model, any serial numbers, status of maintenance, and the condition of the aircraft.

• Set the purchase price of the aircraft.

• Establish what kind of deposit is necessary for the aircraft purchase, who will hold this deposit, and what the terms will be if it is forfeited. Also, it’s important to outline who will pay the agent’s escrow fees.

• Lay out the pre-purchase aircraft inspection that includes the allocation of costs and acceptance criteria. Be sure to include details about the location of the inspection facility, the scope of the inspection, including information about test flights, timing, and who pays for the inspection and the actual movement of the aircraft to the inspection facility. In addition, you will also need to establish the parties’ rights and obligations in the event of a successful or unsuccessful inspection.

• Agree to negotiate and enter into a definitive purchase agreement within a specified amount of time.

Crafting a letter of intention is an inexpensive option that will save both buyer and seller a great amount of time. A good letter of intent will make the aircraft purchase go smoothly with as little conflict as possible.

Lapayowker Jet Counsel, P.A.. is an aviation attorney and aviation transaction lawyer, focusing on airplane and jet transactions. To learn more, visit

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Firm to Contribute to Corporate Angel Network for Each Transaction

By Stewart Lapayowker | March 7, 2010

The Corporate Angel Network, a non-profit organization, matches cancer patients with business aircraft operators so that empty seats may be used to transport patients and their families to facilities for life-saving treatment.  If you haven’t seen their promotional video, you can do so by going to  It is  our firm’s policy to provide every business aircraft owner that we represent with information about CAN and we will be actively contacting existing clients to make them aware of this touching and humanitarian use of empty seats on their aircraft.  The firm also makes a contribution to CAN each time we assist a client with closing a corporate aircraft transaction.  This is our way of giving something back.

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