Transaction Highlights
Represented aircraft owner in connection with the acquisition of Dassault Falcon 900 as part of synthetic lease financing and reverse 1031 exchange involving synthetic lease.
Finanacing Options
In the current economic climate, aircraft financing has become an extremely important aspect of an aircraft purchase, especially since aircraft transactions do not contain financing contingencies like residential mortgage financing. Aircraft financing comes in a variety of forms which typically include: (i) asset based financing, where the lender receives a mortgage on the aircraft, (ii) lease financing, which includes operating leases (where the lessor receives title and tax benefits and registers the aircraft in its name, (iii) synthetic lease financing (where the lessor receives title, but the lessee receives the tax benefits and registers the aircraft in the lessee’s name). It is important to select a lender that can not only provide the most competitive interest rate but is also experienced in business aviation. Aircraft transactions tend to move quickly, with the financing needing to be ready at the time of closing. If financing is not ready when the aircraft is returned to service following its inspection, a buyer can be at risk for default under the purchase agreement thereby putting its deposit in jeopardy.
We have extensive experience negotiating different types of finance documentation including loan agreements, aircraft mortgages, and tax-oriented operating leases with premier aircraft lending institutions.
AVIATION RESOURCES
KEEPING YOU ON COURSE
We are experienced in working with tax, legal and financial advisors of companies of all sizes in addition to family offices, to implement appropriate operating structures and planning objectives. For first time business aircraft buyers, we can quickly assemble a team of experienced industry professionals and others to assist the client with business, technical and other aspects of an aircraft purchase and ongoing aircraft management under Parts 91 and/or 135 of the Federal Aviation Regulations.
One of the challenges of using aircraft in business is understanding the effect of personal use on an executive and the company, and strategies for addressing income tax issues.
Personal Use
Letters of intent are an important start to most aircraft transactions, and failing to give them the proper attention can create costly misunderstandings.
Letters of Intent
Understanding the aircraft acquisition process is important in order to avoid common pitfalls and costly mistakes.
Aircraft Acquisition Process
In order to register an aircraft with the FAA, an individual or company must meet specific requirements. There are methods available for non-U.S. citizens to register aircraft with the FAA.
Aircraft Registration
Public Companies have unique concerns when purchasing corporate aircraft and structuring their operations, including from the perspective of SEC disclosure of non-business use, security and confidentiality.
Public Companies
Acquiring an aircraft currently registered outside the United States takes careful planning and requires answering some fundamental threshold questions. Exporting aircraft may not require the payment of duty, but failure to make appropriate customs entries can be costly.
Import / Export
Planning opportunities exist that can defer or even eliminate the imposition of sales and use taxes in almost every state.
Sales and Use Tax
In addition to aviation counsel, a successful transaction requires having experienced aviation professionals and tax advisors.
The Right Team
Our attorneys are experienced with helping clients navigate the often counter-intuitive rules of the FAA and other regulatory authorities.
The Dilemma of Single Purpose Entities
When acquiring an aircraft, several financing alternatives are available. Which is right for you?
Financing Options
THE RIGHT TEAM. THE RIGHT DEAL.
There is one thing that a safe pilot has in common with a good aviation transaction lawyer: experience — experience with navigating the routine and complex transactional issues, none of which are the same in every deal, but all of which demand in-depth knowledge.
- Stewart Lapayowker