The Oklahoma Bar Journal October 2024

A viation L aw

When an Aircraft Transaction Goes South, Fly Through FAA and International Registry Storms By Tara M. Niendorf E VERYONE HOPES FOR THE BEST IN LIFE – the perfect sourdough loaf, a glorious spring day, the best cup of coffee on this side of eternity and for every aircraft trans action to result in happy borrowers, gleeful lenders and satisfied lessees. Unfortunately, sometimes the loaf fails to rise, tornadoes spring up, the coffee bean bag is empty and a borrower or lessor defaults, leaving lenders and lessees in a lurch.

The savvy aircraft transactor, after briefly panicking, will almost certainly pull out the transaction binder that is provided at the con clusion of an aircraft transaction to double-check that any perfection and priority requirements were met. (Pro tip: Taking care at the outset of a transaction to ensure that all proper steps are taken is the best insurance money can buy!) For aircraft, achieving proper perfection and priority involves a number of steps. These steps should be considered during the process of buying, financing or leasing the aircraft so that all expectations are met when closing occurs. Although not the subject of this article, any local law requirements, including Uniform Commercial Code (UCC) filings, should be satisfied at the time of closing.

with factories all across the world churning out fighters, bombers and transport planes that were needed for the war effort. Of course, pilots (being pilots) found an excuse to fly after all the wreckage from the world wars was shuffled off. Venerable names such as Boeing, McDonnell Douglas and Ford capitalized on the growing interest in using aircraft for civilian transport. 5 After all, it’s a big coun try to be traversed! While the civilian transport market was developing, so was an awareness that some rules would be required to manage the bur geoning field of civil aviation. In 1926, in response to requests by lawmakers and the aviation com munity, a governmental system for aircraft registration and manage ment was established. 6 Lawmakers allowed for title transfer and

HISTORY OF AIRCRAFT REGULATION Aircraft have additional perfec tion and priority requirements due to the overlap of interests between federal oversight and state and local considerations, as well as more recent treaty obligations. A brief history lesson is always helpful in these moments to sort everything out. Prior to World War II, aviation lived in the realm of the military and hobbyists. Certainly, every one knows of the Wright brothers’ flight in December 1903, 1 the most famous among the many aviation pioneers. 2 By 1911, just eight years later, manned flight had progressed from 12 seconds of freedom to use in combat. 3 Aircraft of all kinds were used extensively throughout World War I. 4 Aircraft operations in World War II expanded further

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

18 | OCTOBER 2024

THE OKLAHOMA BAR JOURNAL