What's it called

Tom-D

Tom-D

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Tom-D
When an owner wants to sell half of his aircraft to 4 other pilots?
 
Sounds like the owner wants to share some costs while retaining overall control of the aircraft.

Probably end up being an LLC with the original owner having a controlling interest.
 
thomascannon said:
Fractional ownership?
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You have to be careful with that term because it has some management implications that may or may not apply here, but yeah, it's an 8 share divide and he retains four shares and sells four shares and everyone has an ownership interest.
 
steingar said:
I was referring to the airplane owner. Its a really good deal for the shareholders.
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It can be a good deal all around so long as the terms are to everyone's satisfaction. The owner may want to keep 50% so he has some level of control over what happens in the future.
 
steingar said:
I was referring to the airplane owner. Its a really good deal for the shareholders.
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It could be bad for all.

If the 4 other owners have such small shares, then unless they have a really good relationship with the owner, they are at the mercy of any maintenance or operating decision that he makes.

It could be a alright arrangement, but it could also be a miserable experience.
 
Fearless Tower said:
It could be bad for all.

If the 4 other owners have such small shares, then unless they have a really good relationship with the owner, they are at the mercy of any maintenance or operating decision that he makes.

It could be a alright arrangement, but it could also be a miserable experience.
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At a 50/12.5x4 split, there is the potential for a stale mate.
 
I am wondering what the owner of the other half has to say about it.
Is he ready for 4 new podnahs?
 
In my mind, for an aircraft, all partners should have equal share. What happens when you fly the plane, something breaks, and he has to pony up half of the cost of the repair?

...or is it equal shares only when it come time for expenses?
 
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Let'sgoflying! said:
I am wondering what the owner of the other half has to say about it.
Is he ready for 4 new podnahs?
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It's getting really confusing, the owner bought this aircraft on a 3 way split, he now owns 2 of the 3 shares, and the other 1 share wants out, and thinks his share is worth 10k. There are now 2 other pilots that rent the aircraft and the 2/3rds share holder teaches in it.

Should the 2 other pilots buy the 10k share? @ 5k each?

would that be known as a club to the FAA?

Isn't that aircraft required to have 100 hours inspections pulled on it. ?
 
Brad Z;750014[COLOR="Blue" said:
]In my mind, for an aircraft, all partners should have equal share. [/COLOR] What happens when you fly the plane, something breaks, and he has to pony up of the cost of the repair?

...or is it equal shares only when it come time for expenses?
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That isn't going to happen.
 
Tom-D said:
Isn't that aircraft required to have 100 hours inspections pulled on it. ?
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I can't seem to find it, but I don't think the number of people in the partnership matters to the FAA as it does to the insurance. Too many people and the insurance company may consider it a club and the premium will be much higher.

Even if it is considered a flying club, that alone does not impose a requirement to do a 100 hr.
 
Fearless Tower said:
I can't seem to find it, but I don't think the number of people in the partnership matters to the FAA as it does to the insurance. Too many people and the insurance company may consider it a club and the premium will be much higher.

Even if it is considered a flying club, that alone does not impose a requirement to do a 100 hr.
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The 2/3rds share holder does own the aircraft and is providing him self and the aircraft for a commercial purpose.

The aspect of being a club has no bearing on that.
 
Tom-D said:
The 2/3rds share holder does own the aircraft and is providing him self and the aircraft for a commercial purpose.

The aspect of being a club has no bearing on that.
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Okay, that makes sense - then yes, he would need to do 100 hrs which could be a downside to potential partners. A PPL who just wants to reduce his flying costs may not want to contribute toward doing 100 hrs but he won't have much voting power in that arrangement.
 
Tom-D said:
It's getting really confusing, the owner bought this aircraft on a 3 way split, he now owns 2 of the 3 shares, and the other 1 share wants out, and thinks his share is worth 10k. There are now 2 other pilots that rent the aircraft and the 2/3rds share holder teaches in it.

Should the 2 other pilots buy the 10k share? @ 5k each?

would that be known as a club to the FAA?

Isn't that aircraft required to have 100 hours inspections pulled on it. ?
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Why not take the VREF value of the plane and divide that by 3, and thats the value of each share. If thats less than the 10K the guy thinks its worth, well, to freaking bad.

The 2/3 share owner buys the 1/3 share at the Vref/3 price, and then sells 1 share to each of the two other pilots at vref/3.
 
ajstoner21 said:
Why not take the VREF value of the plane and divide that by 3, and thats the value of each share. If thats less than the 10K the guy thinks its worth, well, to freaking bad.

The 2/3 share owner buys the 1/3 share at the Vref/3 price, and then sells 1 share to each of the two other pilots at vref/3.
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I told him almost that, divide the actual worth of the aircraft by 3, then split the 1/3rd share by 2.
 
Why does he want to keep half the plane? Whats wrong with everyone having an equal share?
 
ajstoner21 said:
Why does he want to keep half the plane? Whats wrong with everyone having an equal share?
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Because he has the most money invested and it is his aircraft and he wants to remain in control of it.

this is not an equal share arrangement.

I told him to buy the other 1/3rd share and simply rent it to the other two pilots.
 
Tom-D said:
It's getting really confusing, the owner bought this aircraft on a 3 way split, he now owns 2 of the 3 shares, and the other 1 share wants out, and thinks his share is worth 10k. There are now 2 other pilots that rent the aircraft and the 2/3rds share holder teaches in it.

Should the 2 other pilots buy the 10k share? @ 5k each?

would that be known as a club to the FAA?

Isn't that aircraft required to have 100 hours inspections pulled on it. ?
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If the 2/3rds owner is providing the instruction and the rental plane, then I'm pretty sure it needs a 100hr unless the only students are the other part owners.
 
Tom-D said:
Because he has the most money invested and it is his aircraft and he wants to remain in control of it.

this is not an equal share arrangement.

I told him to buy the other 1/3rd share and simply rent it to the other two pilots.
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Either way would be workable and there wouldn't really be an operational difference.
 
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