Shackelford, Bowen, McKinley & Norton, LLP https://shackelford.law Law Firm - Dallas, Nashville, Fort Worth & Austin Thu, 10 Jun 2021 14:58:49 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.2 Tips For Responding To FAA’s Office Of Aerospace Medicine https://shackelford.law/news-aviation/tips-for-responding-to-faas-office-of-aerospace-medicine/ https://shackelford.law/news-aviation/tips-for-responding-to-faas-office-of-aerospace-medicine/#respond Fri, 04 Jun 2021 13:59:46 +0000 https://shackelford.law/?p=3464 The post Tips For Responding To FAA’s Office Of Aerospace Medicine appeared first on Shackelford, Bowen, McKinley & Norton, LLP.

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As you may know, the process for obtaining a special issuance medical certificate, or renewal of a special issuance, can be daunting. Depending on the condition, or set of conditions, an airman may be able to provide the AME with the necessary information to be submit in connection with an application. Alternatively, the airman may need to submit information directly to the FAA’s Office of Aerospace Medicine in response to a specific request.
The FAA’s new Federal Air Surgeon, Susan Northrop, MD, recently provided some tips for both airmen and AMEs when submitting information to the FAA.  Here are some of those tips for airmen along with my own recommendations:
  • First, do your homework. Review the FAA’s Guide for Aviation Medical Examiners  on-line before you submit your application.  For most conditions the AME guide will identify not only how the FAA will treat the condition, but also what information it will require in order to issue a medical certificate.
  • Second, if you are going to submit information directly to the FAA make sure you read everything before you send the information to the FAA. If you see something in the records that could raise other flags for the FAA you will then have the opportunity to proactively address the issue rather than having to respond to a follow up request from the FAA. For example, if the records reveal something that should have been disclosed on prior applications but wasn’t, determine what additional information may be necessary to address the non-disclosure. You should then submit that additional information to the FAA.  This will help avoid the delays of back-and-forth correspondence with the FAA.
  • Third, make sure every page is legible, contains at least your name and a date. Any letters from treatment providers need to have an actual signature from the provider.  However, clinical notes and records do not require signatures. If you have the information in PDF format, you may also want to use a header or footer, if possible, in which you include your name, PI #, and App ID # (you will find the latter two on any correspondence you receive from the FAA).  That way if any pages get separated before your package is scanned into the FAA’s Document Imaging Workflow System the FAA will know to which file they belong.
  • Fourth, make sure you provide the FAA with each item requested.  A partial submission will only result in further delay as the FAA sends a follow up letter repeating its request for any missing items. A complete package will ensure that the FAA can proceed with its review of your application.
  • Fifth, include your correct contact information, including phone number, so the FAA can contact you if needed.
  • Sixth, if you are unable to obtain the requested information within the time allotted (usually 30 or 60 days), request an extension. You can do so by contacting the Airman Medical Certification Division or your Regional Flight Surgeon’s office. In most instances the FAA will grant a limited extension.
  • Finally, when you send information, use a delivery method that provides you with tracking information and proof of delivery. And  keep a copy of everything you send to and receive from the FAA. It isn’t unheard of for a package to be misdelivered or for the FAA to misplace it once received.  If you have copies it will be easy enough to re-send if necessary.
Following these tips will not guaranty that the FAA approves a medical application and issues you a medical certificate. However, these steps will minimize unnecessary delays and the time required for the FAA to review, process, and make a decision regarding your application.
If you have questions regarding the medical application process or need assistance in responding to FAA requests for information, please feel free to contact me. I’m happy to assist.

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Salesmanship Club makes millions for kids’ nonprofit as AT&T Byron Nelson moves north to McKinney https://shackelford.law/news/salesmanship-club-makes-millions-for-kids-nonprofit-as-att-byron-nelson-moves-north-to-mckinney/ https://shackelford.law/news/salesmanship-club-makes-millions-for-kids-nonprofit-as-att-byron-nelson-moves-north-to-mckinney/#respond Tue, 01 Jun 2021 22:43:32 +0000 https://shackelford.law/?p=3456 The golf tournament’s party atmosphere returned this May after a devastating experience at Trinity Forest.

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By ,  writer at the Dallas Morning News

Mike McKinley, president of the Salesmanship Club of Dallas, is practically giddy about how the AT&T Byron Nelson turned out.

The Nelson — which relocated to the TPC Craig Ranch in McKinney after two disastrous years at Trinity Forest in southern Dallas and a pandemic-canceled tournament in 2020 — earned enthusiastic high-fives from fans, players, the PGA Tour and the media.

Not even a deluge on the tournament’s final day could dampen the party atmosphere as thousands of fans enjoyed professional golf almost the way it used to be — maybe even better.

View full article here.

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Illegal Charter https://shackelford.law/news/illegal-charter/ https://shackelford.law/news/illegal-charter/#respond Thu, 20 May 2021 22:34:15 +0000 https://shackelford.law/?p=3445 Footballer Emiliano Sala and his pilot died two years ago when an illegal charter flight crashed into the sea. How common is illegal charter and what can be done to combat the global problem?

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By Yves Le Marquand | Corporate Jet Investor


Tributes to Emiliano Sala were laid at Cardiff City Stadium in the days after the fatal crash.

 

“I am aboard a plane that seems like it is falling to pieces”

Footballer Emiliano Sala and his pilot died two years ago when an illegal charter flight crashed into the sea. How common is illegal charter and what can be done to combat the global problem?

You can hear the fear in the young football star’s words. It was one of Emiliano Sala’s last messages. More than two years have passed since the PA-46 Piper Malibu piloted by David Ibbotson carrying the Argentine Sala to his new career at Cardiff City Football Club plunged into the English Channel killing both men. But the industry appears little closer to remedying grey or illegal charter – neither in the UK nor worldwide.

Some facts are beyond dispute. The final report from the UK government’s Air Accidents Information Branch (AAIB), published in March 2020, concluded neither Ibbotson nor the Piper Malibu, N264DB, held the correct licensing to operate commercial flights. It also said that Sala would have been “deeply unconscious” due to carbon monoxide poisoning at the point of impact. The report contains safety recommendations concerning: the fitting of carbon monoxide (CO) detectors; additional in-service inspections of exhaust systems; and the maintenance of flight crew licensing records.

In October 2020, the UK Civil Aviation Authority (CAA) confirmed its intention to prosecute David Henderson. He is a British pilot who was allegedly replaced by Ibbotson on the day of the flight, in connection with the plane crash.

Crispin Orr, chief inspector of air accidents at the UK Air Accidents Investigation Branch (AAIB), was clear in his condemnation of illegal charter: “The chartering of aircraft that are not licensed for commercial transport – so called ‘grey charter’ is putting lives at risk. We welcome the Civil Aviation Authority’s efforts to stop this practice through their ‘Legal to Fly’ campaign and other interventions.” An independent transport review, commissioned by the UK government, will probe the problem of illegal charter.

But the problem is not confined to the UK. Most countries around the world have long grappled with the threat.

In the US, David Norton, aviation attorney, with Shackelford, Bowen, McKinley and Norton, based in Dallas Texas, said illegal charter is a growing problem. “It’s always been an issue under our rules because they are not as crystal clear as it should be,” Norton told Corporate Jet Investor. “But I think the feeling over here is that it started really to kick off with the Great Recession in 2008. Where a lot of people had airplanes to commute around, they were paying a lot of money for them and they were looking for ways to offload that cost.”

Norton said the issue of illegal charter has been around for “forever”. He recalled: “I wrote an article that talked about improper ownership under our US rules, which are slightly different than the UK rules under certain ownership structures. I wrote that article back in 2002, because it was so prevalent back then, and I still get clients who call me because of that article. So, it’s been a problem for forever. Part of it is all the civil aviation organisations can barely keep up with the scheduled airlines, let alone people flying airplanes, especially here in the US where it’s so spread out.”

Norton has been practicing aviation law for three decades, he pointed to the ebb and flow of illegal charter’s prominence in the limelight. The efforts against illegal charter were ratcheted up in 2001 to 2002, according to Norton, after a Gulfstream aircraft, too heavy for flight, attempted take-off at Teterboro, New Jersey. The jet veered off the runway, across the highway and crashed into a hangar. While everyone in the plane survived, the crash killed a passing motorist and “in a big way” caught the attention of the FAA.

 

Read the full article on Corporate Jet Investor

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COVID Vaccines In Aviation: What Pilots And Employers Need to Know https://shackelford.law/news-aviation/covid-vaccines-in-aviation-what-pilots-and-employers-need-to-know/ https://shackelford.law/news-aviation/covid-vaccines-in-aviation-what-pilots-and-employers-need-to-know/#respond Fri, 14 May 2021 14:39:31 +0000 https://shackelford.law/?p=3440 The post COVID Vaccines In Aviation: What Pilots And Employers Need to Know appeared first on Shackelford, Bowen, McKinley & Norton, LLP.

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With the ever-changing landscape of COVID’s impact on the world and the now readily available vaccinations for the virus, many pilots (and their employers) have questions.  I thought I would take a moment to address a couple of the questions I have received.
What Is The FAA’s Position On Vaccines?
The FAA does not have a position on whether an airman should or should not be vaccinated.  However, the FAA does take a position on what happens if an airman is vaccinated. Specifically, it is concerned about the potential side effects an airman could suffer after receiving a vaccination.  As a result, the FAA’s Federal Air Surgeon has stated that FAA medical certificate holders may not act as pilot in command, or in any other capacity as a required flightcrew member, for 48 hours after each dose a COVID vaccine.
However, an airman may do the following during the 48-hour post-vaccination period:
  1. Provide/receive flight simulator or aviation training device instruction, including ground instruction or operational training not involving flight operations;
  2. Perform office duty/administrative tasks;
  3. Dead-head/jump-seat; and
  4. Engage in distance learning.
Airmen who receive vaccinations are also reminded that they must also still comply with 14 CFR § 61.53(a)’s prohibition on operations during medical deficiency.  This means that an airman who experiences side effects after the 48-hour period has elapsed, may not act as pilot in command, or in any other capacity as a required flightcrew member until after the airman is no longer suffering from those side-effects.
May An Employer Require Its Employees To Be Vaccinated?
The short answer is “yes.”  Both the Equal Employment Opportunity Commission and the Occupational Safety and Health Administration have stated that an employer may require its employees to be vaccinated.  However, implementation of a mandatory vaccination policy or program must also comply with other regulations.
For example, such a policy or program must comply with the Americans with Disabilities Act (“ADA”).  Aviation employers need to carefully craft their vaccination mandates to ensure they do not discriminate against employees with disabilities.  This means if an employee has a disability that prevents the employee from taking the vaccination, he or she may be entitled to an exemption or other reasonable accommodation under the ADA
Similarly, if an employee has a sincerely held religious belief, practice, or observance that prevents the employee from being vaccinated, under Title VII of the Civil Rights Act (“Title VII”) he or she may be entitled to a reasonable religious accommodation.  In either case, whether under the ADA or Title VII, aviation employers face multiple requirements to successfully implement a vaccine mandate.  Employers and their affected employees need to work together to implement accommodations that protect the rights of both and also comply with applicable law.
Conclusions
Airmen who choose to be vaccinated need to be aware of, and comply with, both the FAA’s 48-hour rule as well as FAR 61.53.  And before an aviation employer requires its employees to receive COVID vaccinations, the employer should carefully evaluate the implications, risks, and consequences of such a policy or program.  If you have questions about airmen and/or aviation employer rights and responsibilities in connection with COVID vaccinations, please contact us and we would be happy to assist.

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Time to Get a Lawyer? Aviation Legal Issues – InTheHangar Ep 129 Feat. Greg Reigel https://shackelford.law/news/time-to-get-a-lawyer-aviation-legal-issues-inthehangar-ep-129-feat-greg-reigel/ Wed, 05 May 2021 17:25:15 +0000 https://shackelford.law/?p=3406 Ever get the dreaded "standby to copy number" directive from ATC? Or do you need to set up a plane partnership? Christy (@PilotChristy) and Dan (@TakingOffDan) speak to aviation attorney Greg Reigel

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Ever get the dreaded “standby to copy number” directive from ATC? Or do you need to set up a plane partnership? Christy (@PilotChristy) and Dan (@TakingOffDan) speak to aviation attorney Greg Reigel from https://www.shackelford.law about both enforcement and entities. What does a lawyer think of Christy’s discovery of her Wong Warrior being flown inverted? Should she dox the guy? Greg weighs in and also on the Vegas Bravo Buster.

 

See the full Video here

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Drafting An Aircraft Mechanic Lien Statement https://shackelford.law/news-aviation/drafting-an-aircraft-mechanic-lien-statement/ Mon, 26 Apr 2021 22:08:18 +0000 https://shackelford.law/?p=3387 The post Drafting An Aircraft Mechanic Lien Statement appeared first on Shackelford, Bowen, McKinley & Norton, LLP.

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If you perform work, provide services, or furnish materials to an aircraft, you likely have the right to assert a lien against that aircraft.  A lien may also arise from a lien claimant’s storage of an aircraft.
Aircraft mechanic liens are governed by state law.  And each state is a little bit different.  However, most states require that a lien statement be filed with the Federal Aviation Administration (“FAA”) within a certain period of time.
What Does The FAA Require?
In order for the FAA to accept and record a lien statement, it must include the following:
  1. The state or the specific law under which the lien is being claimed;
  2. A description of the aircraft including manufacturer, model, serial number, and registration number;
  3. The amount of the claim;
  4. The date on which the last labor, services, or materials were furnished on/to the aircraft; and
  5. Signature of the claimant showing appropriate title of the individual signing the statement.
What Else Should Be Included?
In addition to meeting the FAA requirements, the lien claimant must also meet the applicable state requirements. For example, if the lien claimant is required to maintain possession of the aircraft, then the lien statement must address this information.
Alternatively, if the lien claimant is required to surrender possession of the aircraft, then the lien statement must provide this information. Also, if local law requires the lien statement to be verified (acknowledged before a notary public), that must be included as well.  The FAA will reject the lien statement if the required information or verification is missing.
Although not usually required, the lien statement may also include the date the work was authorized and who authorized the work. However, unless specific state law requires it, the FAA will not reject the lien statement if this information is not shown.
What Happens If The FAA Has Questions?
If the FAA receives a lien statement identifying a lien claimant who does not appear to be located or doing business in the state under whose law the lien is claimed and the aircraft is registered in different state, that could raise questions for the FAA. It will wonder whether/what work was performed on the aircraft in the state claimed.
In this case the FAA may request supporting documentation to establish the connection with the state claimed.  It may also ask the lien claimant to re-file the lien statement with attached invoices, a clarification statement, or other documentation reflecting work was performed on the aircraft in the state claimed.
Local Recording
In addition to filing with the FAA, some states also require a lien claimant to file their lien statements.  This could be with a county clerk, a clerk of courts, a register of deeds, or a county recorder.  In this situation, the lien statement filed with the FAA must include either the local file-stamp or certified copy confirming it was filed with the correct local office within the applicable time frame. Without this confirmation, the FAA will reject the lien statement.
Effect Of Filing With The FAA
It is important to understand that the FAA merely records aircraft lien statements submitted by lien claimants. As long as the lien statement contains the required information, the FAA will accept and record the lien statement. However, the FAA registry will not take any position regarding the validity or enforceability of the lien claim, nor does it get involved with any dispute between the aircraft owner and lien claimant.
Conclusion
Lien statements can be tricky.  Before you file, make sure you understand both the FAA and local requirements. And if you need help filing or enforcing an aircraft mechanic lien, please give me a call.

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So Google Beat Oracle at SCOTUS: What Does That Mean for My Software IP Strategy https://shackelford.law/news/so-google-beat-oracle-at-scotus-what-does-that-mean-for-my-software-ip-strategy/ Fri, 23 Apr 2021 16:41:55 +0000 https://shackelford.law/?p=3384 On April 5th, the U.S. Supreme Court handed Google a victory in its prolonged dispute with Oracle. Much has already been written about the merits of the decision, but the larger question is what to do about it?

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By David Lovell,  Partner at Shackelford, Bowen, McKinley & Norton, LLP

So Google Beat Oracle at SCOTUS: What Does That Mean for My Software IP Strategy

On April 5th, the U.S. Supreme Court handed Google a victory in its prolonged dispute with Oracle. The dispute relates to Google’s use of Oracle’s Java Standard Edition (SE) application programming interface (API) in its Android platform. Much has already been written about the merits of the decision, but the larger question is what to do about it?  Below are practical takeaways for software developers and technology companies.

1. The decision did not eliminate U.S. copyright protection for software. 

U.S. copyright protection for software is explicitly provided for by statute, with 17 U.S.C. § 101 addressing software in terms of a computer program.  A computer program is defined as “a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result.” Subject to certain limitations, original works of authorship that are fixed in a tangible medium of expression, including software, remain eligible for copyright. This decision avoids the question of copyrightability. It instead addresses whether Google’s copying was fair use.  As described in further detail below, the Court found that Google’s copying of specific portions of the Java SE API was fair use, thereby allowing Google to avoid what otherwise might be considered copyright infringement.

2. The copyright-limiting, fair-use aspects of the decision specifically relate to how functions are called in software libraries and APIs.  Other aspects of software copyrights are mostly unimpacted.

The Java SE API provided a programmer-facing interface for use by software developers.  Accordingly, the Java SE API provided an organized way to call a set of reusable software functions.  In its analysis, the Court separated the Java SE API into declaring code and implementing code.  As generally treated by the Court, the declaring code is the organized way in which the software functions are called or invoked. The implementing code, in contrast, is the code that performs the software functions when they are called.  Google had copied large portions of the Java SE API’s declaring code due to widespread developer familiarity with the code. However, Google had written its own implementing code. After a fact-intensive analysis using four statutory factors, the Court concluded that Google’s copying of the Java SE API’s declaring code was fair use and thus did not constitute copyright infringement.

Significantly, the Court makes it clear that implementing code likely would have been treated differently in its fact-intensive analysis. In other words, if Google had copied the implementing code of the Java SE API, it is unlikely that such copying would have been considered fair use. Other types of software code, whether source or object code, should be similarly unimpacted by the decision as long as such code is not analogous to declaring code in a programmer-facing interface.

3. Copyrights are still an important part of a comprehensive software intellectual property (IP) strategy.

As noted above, the Court’s decision is largely limited in scope to the copying of declaring code in a programmer-facing interface.  Since software copyrights have broader applicability than declaring code, copyrights can still provide protection against, for example, literal copying.  Additionally, the Court’s fair-use determination was, in part, dependent upon case-specific facts. Therefore, there may exist facts under which the copying of declaring code would not be considered fair use.

4. A comprehensive software IP strategy should diversify beyond copyrights. Consider and choose the right combination of IP tools.

Different types of intellectual property are appropriate for protecting different aspects of software. For example:

  • Design patents can protect graphical user interfaces, for example, subject to novelty, non-obviousness, and other statutory requirements.
  • Utility patents can protect software functionality, for example, subject to novelty, non-obviousness, and other statutory requirements.
  • Trademarks can protect an identifier of a source of software-related goods or services.
  • Trade-secret protection may be appropriate for information that has commercial value, so long as reasonable steps are taken to keep the information confidential.
  • Agreements may be used to protect confidentiality and to control, for example, how software is licensed and used.

5. An existing best practice remains important. Lessen the opportunity for software code to be copied. Limit disclosure and access.

Protect software code from disclosure to the extent feasible, for example, via nondisclosure or other agreements or by not disclosing at all.  In recognition that copyright protection for declaring code in programmer-facing interfaces may be thin, be strategic about the functions that are included in such interfaces.  Consider not including, or hiding in internal interfaces, strategic arrangements of functions that do not need to be exposed. If competitor copying of declaring code is of particular concern, consider other creative ways copying might be deterred or made ineffective.

6. Remember that software licenses, including open-source licenses, are based upon an underlying copyright.  Consider this decision as you craft your licensing strategy.

Whichever side of a license you may be on, consider the software code at issue. For example, as a prospective licensor, you may want to contractually limit a licensee’s ability to copy and use declaring code.  As a prospective licensee, if declaring code is involved, you may want to use the principles of the decision to negotiate a lower licensing cost. 

7. This decision is not a blanket license to freely copy software code.

As noted above, software code remains copyrightable.  Software code can also implicate numerous other types of IP.  Any decision to copy software code introduces substantial risk and requires appropriate due diligence.

 

Download full article here.

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Will The FAA Accept My Application For Registration? https://shackelford.law/news-aviation/aviation-law-articles/will-the-faa-accept-my-application-for-registration/ Fri, 09 Apr 2021 16:53:20 +0000 https://shackelford.law/?p=3379 The post Will The FAA Accept My Application For Registration? appeared first on Shackelford, Bowen, McKinley & Norton, LLP.

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In order for the FAA to accept an application for aircraft registration submitted by an aircraft owner-applicant, the applicant must comply with the registration requirements of 49 U.S.C. 40102(a)(15) and 44102.  Applicants must also comply with 14 C.F.R. Part 47.
The applicant requirements vary somewhat depending upon whether the applicant is an individual, a partnership, a corporation, a limited liability company etc.  If the applicant is unable to satisfy the requirements, the FAA will not accept an application for registration from the applicant.
Here is a short summary discussing a few of the types of applicants and applicable FAA registration requirements:
Individual
An individual is eligible to register an aircraft if the individual is a U.S. citizen or a resident alien.  This means a warm body, not an entity that might otherwise be considered a person under the law.  Pretty straightforward.
Partnership
Two types of partnerships may be eligible to register an aircraft:  (1) a general partnership; or (2) a limited partnership.  A general partnership is an association of at least two or more individual persons to carry on a business for profit.  A limited partnership may include one or more “general partners” and any number of “limited partners.
Under 14 C.F.R. § 47.7(d), a partnership is eligible to register an aircraft if all of its partners are individuals who are U.S. citizens. Here again, “individual” person means a warm body, not an entity such as a corporation that may otherwise be considered a “person” under the law.  Also, a resident alien may not be a member of a partnership.
Although many states also recognize limited liability partnerships or registered limited liability partnerships, these entities are treated like any other partnership.  So, they must include only individual members who are U.S. citizens in order to register an aircraft.  Similarly, in order to be eligible for registration, a limited partnership must be comprised entirely of individual U.S. citizens.
However, most limited partnerships are formed with limited partners, who may be individuals or entities, and a general partner that is usually an entity rather than an individual (for liability protection purposes).  As a result, limited partnerships do not usually satisfy the citizenship requirements for registering an aircraft.
Corporation
U.S. Citizen Corporation:            Under 14 C.F.R. § 47.2(2), a corporation is eligible to register an aircraft as a U.S. citizen if:
  1. it is created or “incorporated under the laws of the U.S., or any State, Territory, or possession of the U.S.;
  2. the corporation’s president and two-thirds or more of its Board of Directors are U.S. citizens, and;
  3. at least 75% of the voting interest in the corporation is owned or controlled by U.S. citizens.
In this situation, the FAA wants to ensure that the corporation is actually controlled by U.S. citizens.  But what happens is the corporation satisfies items (1) and (2), but it does not meet the 75% quota?  Under 14 C.F.R. § 47.8 the corporation may still be able to qualify as a U.S. citizen if it uses a voting trust which appoints a voting trustee (who must be a U.S. citizen) to exercise the voting rights necessary to satisfy the 75% quota.
Non-Citizen U.S. Corporation:    If a corporation is incorporated in the U.S. but does not meet the citizenship requirements for registration, under 14 C.F.R. § 47.9 that non-citizen corporation may still be eligible to register an aircraft.  The corporation must:
  1. be lawfully organized and qualified to do business under the laws of the U.S. or any State, Territory, or possession of the U.S.; and
  2. certify that the aircraft is based and primarily used in the U.S., meaning at least 60% of the aircraft’s total flight hours during each six month period after application must be within the U.S. Flight hours must be for non-stop flights between two points within the U.S., although the aircraft may be outside the U.S. during part of the non-stop flight.
Limited Liability Company
Each member of a limited liability company (“LLC”) must qualify as a U.S. citizen.  The members need not be individuals.  However, if one of the members is another LLC, that LLC must also qualify as a U.S. citizen.
If all of the individuals or entity members are not U.S. citizens, in order for the LLC to satisfy the citizenship requirement, two thirds of its officers/managers must satisfy U.S. citizens and 75% of the voting interest of the LLC must be controlled by individuals or entities meeting U.S. citizenship requirements.
Although an LLC may not create a voting trust to qualify for citizenship, a member of an LLC may use a voting trust to qualify for citizenship by assigning the member’s voting or management rights to a trustee who qualifies as a U.S. citizen.
Co-Owners
Co-owners may be comprised of individuals, including resident aliens, partnerships, corporations, LLCs, and others who are eligible applicants.  As long as each co-owner is separately eligible to register an aircraft then the co-owners may together apply for registration.
Trusts
A trust may be used to register an aircraft in a variety of situations.  Often a “non-citizens trust” is used when the applicant does not qualify as a U.S. citizen but still wants to register the aircraft with the FAA.  Sometimes a trust is used for estate or tax planning purposes.  Trusts are a useful tool, but because the details and nuances of using a trust for aircraft registration purpose can be complicated, that discussion will have to wait for another day.
Conclusion
Applying for registration of an aircraft with the FAA can be tricky.  You need to ensure that the FAA will accept your application and register the aircraft.  Understanding the FAA’s requirements can help you avoid some of the “gotcha’s” that can cause problems for an aircraft owner trying to register an aircraft with the FAA.  If you have questions or need help determining whether you are eligible to register your aircraft with the FAA, please contact us.

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Attorneys Should Avoid Any ‘One-Size-Fits-All’ Approach in Texas Winter Storm Claims https://shackelford.law/news/attorneys-should-avoid-any-one-size-fits-all-approach-in-texas-winter-storm-claims/ Mon, 29 Mar 2021 21:36:46 +0000 https://shackelford.law/?p=3374 The insurance industry is processing an unprecedented amount of claims following the brutal winter storm that slammed through most of Texas last month,…

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By Kenneth Artz and Mark Moore | March 17, 2021 | Law.com | Texas Lawyers


Father John Szatkowski of St. Paul The Apostle Church sweeps water from a broken water line out of his church in Richardson, Texas, Wednesday, Feb. 17, 2021. Father Szatkowski and his staff found the flooding as they prepared for Ash Wednesday services. (AP Photo/Tony Gutierrez)

The insurance industry is processing an unprecedented amount of claims following the brutal winter storm that slammed through most of Texas last month, says Bruce Wilkin, a partner in the Houston office of Shackelford, Bowen, McKinley & Norton LLP where he represents clients at both the trial and appellate level in commercial, energy, environmental, and first-party insurance disputes.

“Several adjusters have equated this to a major hurricane hitting every major town in Texas on the same day,” Wilkin said. “As a result, insurers have likely adopted an “all hands on deck” approach to try and cover the onslaught of claims.”

Read the full article on Texas Lawyer

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Finding Growth in a Changed World https://shackelford.law/news/finding-growth-in-a-changed-world/ Mon, 08 Mar 2021 18:10:51 +0000 https://shackelford.law/?p=3371 NAFA member, David Mayer, Partner at Shackelford, Bowen, McKinley & Norton, LLP, shares his perspective of business aviation amid the pandemic.

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david mayer attorney lawyer at shackelford law firm

NAFA member, David Mayer,  Partner at Shackelford, Bowen, McKinley & Norton, LLP, shares his perspective of business aviation amid the pandemic.

Shifting markets are creating new opportunities in a world altered by COVID-19. Here are some to consider.

WITH EVERY NEW YEAR COME HOPES FOR A BETTER WORLD, and 2021 is fairly bristling with them. Of particular relevance to equipment finance companies is the Equipment Leasing & Finance Foundation’s 2021 Equipment Leasing & Finance U.S. Economic Outlook, which forecasts 7.8% growth in equipment and software investment this year, and 4.7% growth in the U.S. Gross Domestic Product. Heartened by plans for widely distributed vaccines against COVID-19, industries and the companies within them are re-tooling to apply permanently many of the technologies and efficiencies necessitated by the pandemic. Equipment Leasing & Finance spoke to leaders in several equipment sectors experiencing changes that are leading to growth.Here’s what we learned:

 

There’s a Window in Trucking 

Howard Shiebler is President of Crossroads Equipment & Finance LLC and Chairman of Velocity SBA, both in Rancho Cucamonga, California. Financing commercial trucks for transportation companies gives him a strategic view of one of the largest and most dynamic sectors in equipment finance. “We’re in an abnormally strong market now, both with values and the demand for tractors and trailers,” he says. “For those financing in this space, new business volume is up and repossessed inventory is selling quickly, and at good prices.”

The big question is how long current conditions will last. Increased consumer spending, much of it done online, helped freight markets recover quickly from initial pandemic shock. If economic recovery continues, Shiebler expects the strong transportation market to last well into 2021.

“Additionally, manufacturers of trucks and trailers have had their supply chains and work forces impacted by the pandemic, and the corresponding shortage of new equipment has driven demand and prices for used equipment to unusually high levels,” Shiebler notes. He adds, “I think some e-commerce-driven demand will become permanent, and manufacturers will eventually catch up with market demand, leading to a more typically cyclical transportation finance market.”

Nonetheless, Shiebler says equipment finance companies must still do a thorough job of underwriting in the space or risk getting into trouble. “When the economy slows, we’ll see freight rates drop, defaults increase and used truck prices drop fairly quickly,” he warns. “Lenders that understand this cycle underwrite to it, and they also properly staff collections and remarketing operations to deal with increased defaults.”

 

Healthcare Providers Want More Options 

Jon Biorkman is President of Healthcare Financial Services at GE Healthcare. As the dynamics of the medical equipment market change, he sees healthcare providers revisiting budgeting, capital structure and other fundamentals of corporate finance to re-evaluate strategy and develop multiple scenarios for use in times of economic uncertainty.

“To account for variability, leadership teams are examining operating and non-operating cashflows, liquidity sources and cash on the balance sheet,” says Biorkman. “And as market dynamics continue to change, we’re bringing optionality to the table. This can be in terms of structure that allows for the deferment of a more permanent position, or increased liquidity to protect against unpredictable variability in patient volumes, payors and reimbursement trends.”

One such option is an escrow agreement that pre-funds capital for future equipment acquisitions. “The benefit is to lock in interest rates today, and secure capital for upcoming needs,” says Biorkman. Another option shortens the lease term, enabling equipment usage without full capital outlay.

“Creativity is something that matters to customers, and if we look at the market we’ve been operating in, it’s been incredibly dynamic,” Biorkman observes. “We view our role as providing customers with options for a future that may not be certain. We’re having candid conversations with them, being very grounded as it relates to financial projections—where they were before, where they are now, where they’re going. Liquidity and cash on the balance sheet have always been important, but today, customers are placing a premium on both—and alternative financial structures can really provide more tools.”

 

Aircraft Has Pockets of Promise

David Mayer, Partner at Shackelford, Bowen, McKinley & Norton, LLP, in Dallas, says the COVID crisis created a potential cash crunch for some owners of aircraft, and that a significant number of these are refinancing or entering into sale-leasebacks to cash out their equity in the equipment. “This is a global phenomenon, also driven in part by lower interest rates,” says Mayer. The upshot: opportunities exist in sale-leasebacks for those able to take residual risk, not just in tax leases, but in true or operating leases.

Mayer says there are also leases in which the credit advanced is fully paid out and the asset is sold for a purchase price at the end, which can be as low as $1 or another agreed price. “These deals have been active since the emergence of the pandemic and since rates have dropped,” he says. “I expect this trend to continue into 2021.”

Mayer has handled a number of such transactions and sees a particular market for the refinancing of larger jets with a value of $7 million or more. “One challenge for equipment finance companies will be to persuade customers that they won’t suffer ‘brain damage’ from engaging in a financing transaction,” says Mayer, tongue in cheek. “I say that because, compared to purchasing or borrowing, leasing is a more complex transaction.” Another deterrent among high-net-worth individuals and companies is pride of ownership and reluctance to use a financing product or allow a lessor or lender to control use of their aircraft.

“Make no mistake, the market is under stress and the pandemic is not helping,” Mayer cautions. “Companies that buy, lease or charter aircraft are leaving the business. But financiers are ready, able and willing to finance, and are doing more secured loans than true leases because they’re unable or unwilling to take the risk on the value of these assets.”

The aircraft market was on a downslope that started in 2019, and prices dropped another 10 to 15% at the start of COVID-19 before showing later indications of stabilizing. “But owners didn’t panic and sell; they were smart enough to stand by and wait—unlike what happened in 2008,” says Mayer. “Now equipment finance companies can provide these owners with smart and viable solutions in the form of true leases, tax leases, loans and sale-leasebacks.”

 

Small Businesses Need Your Capital

Marlin Capital Solutions provides equipment financing, working-capital loans, vendor financing and franchise financing to approximately 100,000 small businesses throughout the U.S. Thus, the company’s portfolio is a small-business index for sentiment and economic health, and CEO Jeff Hilzinger says the pandemic put the company “right at the center” of the 2020 economic storm.

“After ensuring the safety of our employees and the stability of our financial portfolio, we transferred people from our front office to our servicing team and immediately began reaching out to customers,” says Hilzinger. “We processed almost 6,000 requests for payment relief, most of them during April and May. And because we own a bank, we have an SBA license and were able to lend under the PPP program. We quickly created a platform to do that. Along with the payment relief we were providing, our goal was to preserve as much liquidity for our borrowers and in our own portfolio as possible.”

As Marlin helped its customers, the company also saw an opportunity to help itself. “The PPP platform we obtained was digital, and we’d always known we needed to become more digital,” says Hilzinger. “Once we took care of our employees, partners and customers and saw that the pandemic would last a while, we realized it could be a crisis of opportunity for us. We decided to dramatically accelerate our digitization and have been focused on it since June.”

In 2015, the New Jersey-based, small-ticket Independent had introduced a working-capital loan product to compete against fin techs. “We were always careful with it, because it hadn’t gone through a complete business cycle,” says Hilzinger. “But it turns out that the product performed much better than we expected, so now we’re redoubling our efforts
with it.”

Because the small-business market resides next to the consumer market, Hilzinger says much of what consumers do with their personal credit can be projected for use in small business. “Once customers can access us digitally, we’ll be able to offer lines of credit and other micro-ticket products that were too much work to provide when our processes were manual,” he says. “Now we can offer these in ways that will be exciting to small businesses, and of economic benefit to us. Going digital definitely opens up new opportunities.”

 

Schools Urgently Need IT 

Insight Financial Services (IFS) in Costa Mesa, California began studying the nuances of the k-12 school market about six years ago with the goal of doing business there. Through networking, they were introduced to OETC, an Oregon-based consortium that offers contracts for products supplied to K-12 schools and universities throughout the Pacific Northwest. “Needs were starting to change for schools at the time, and one of our customers suggested we talk to OETC about the consortium developing an RFP for school districts to lease IT,” says Andy Hashimoto, Vice President.

Over the next year, Hashimoto and Colleen O’Donnell, IFS Senior Vice President of State, Local and Education Business, explained to OETC the benefits municipalities and schools could leverage through leasing. A contract with IFS would allow OETC-member schools to acquire equipment without requesting proposals.

“What we found with many schools is that their previous plan had been to put equipment in the classroom with teachers and keep it until it didn’t work anymore,” says O’Donnell. “But the idea was evolving that schools need a sustainable strategy for IT and a budget to support it. They need technology that matches the curriculum, technology for both students and teachers that brings digital learning to life.”

COVID-19 greatly accelerated the need, and this past October, IFS was awarded a three-year contract as an approved IT equipment leasing services vendor in California. The contract is in addition to a nationwide agreement IFS already has with OETC, and expands the services the company can provide in California.

“This is a growing market for us, and we’ve experienced significant growth over the last couple of years,” says Hashimoto. “Today, school districts need large numbers of devices, and these can be acquired through a leasing contract that manages the entire life cycle.”

To that point, Hashimoto says much of IFS’s growth in the school market is attributable to asset management services included in the company’s contracts. “The asset management is geared to specific devices and allows school districts to be in control of what happens to the equipment,” he says. And because IFS tailors its leases to individual school-district budgets and needs, IFS is able to serve every customer. “We invest the time with each school district to customize the solution so that it works specifically for them,” says O’Donnell. “We structure from beginning to end to help them have the technology they need to support learning in the classroom and from home.”

Asked for suggestions for other equipment finance companies considering the school market, Hashimoto and O’Donnell have several thoughts. “Colleen and I have joked that we are evangelists for leasing, but it’s true that customers need to be educated about how leasing can help them,” says Hashimoto. “Our message about this has been the same since we started with the education market, but with COVID-19 driving and accelerating the need for IT equipment, what we had to say became that much more important and understandable. Communicate often with your customers, and explain clearly how leasing can be a solution for budgets, for obtaining the equipment they need, and for controlling what happens to that equipment at the end of the lease.”

Adds O’Donnell, “I’d say the willingness to be nimble, to explore the market deeply and invest time communicating with prospects and building relationships, is extremely important. Working this way is a cornerstone of our business, and by doing it, we’re in  a position to respond immediately when needs change or a crisis arises. It’s how we provide solutions our  customers are looking for.”

This article originally appeared in Equipment Leasing & Finance Magazine’s Jan/Feb 2021 Issue.

Read full article at https://www.nafa.aero/articles/finding-growth-in-a-changed-world.

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