Here is what our Aviation Group has done for our clients, and what we can do for your aviation business:
Acquisitions, Divestitures, and Mergers of Aviation Companies and Assets
- M&A counsel for purchaser to acquire Swiss based airline conducting cargo operations and unscheduled passenger flights with 21 fixed-wing aircraft. Transaction involved unusually complex legal, tax, investment, financial, operational, regulatory, litigation, and due-diligence issues across 6 countries in 4 continents. All issues were framed and had to be solved within a 4-month period to avoid the loss of the deal for the purchaser. As lead counsel, applied aviation expertise so team could satisfy difficult legal requirements of purchaser, seller, lenders, aircraft lessors, pilots, investors, aviation authorities, and other regulatory bodies. Deal closed "just under the wire" set by the seller as a non-negotiable deadline.
- M&A counsel for purchaser’s effort to acquire two airlines (one in Belgium and one in Spain) as mandated spinoffs from then proposed $6.8 billion merger between UPS and TNT. Effort required navigation of complex, multi-country due diligence and deal documents. As lead counsel, directed efforts of three other law firms who acted as special counsel in Belgium, the UK, and Spain. Transaction ended when purchaser lost competition for business reasons, and UPS/TNT merger failed to gain EU approval.
- M&A counsel for purchaser to acquire 45% equity interest in established air cargo joint venture in the Far East, rooted in Thailand and Malaysia.
- M&A counsel for seller to divest a group of four airlines, two based in EU, one based in India, and one based in Thailand. Together, four airlines provided a wide range of aviation services across the world. Led legal side of entire divestiture effort, managed local counsel, and conducted closings, across nine countries: Thailand, India, Cyprus, Hungary, Austria, Germany, Switzerland, Ireland, and Bermuda.
- Aviation and M&A counsel to fleet owner-operator of over 400 helicopters used for air medical transport in the following acquisitions:
- Sundance Helicopters, Inc., a helicopter tour operator with 20 aircraft based in Las Vegas, Nevada, which focuses primarily on Grand Canyon helicopter tours, but also helicopter services to support firefighting, natural resource agency operations, vertical lifts, aerial photography/motion pictures, news gathering, and aerial surveying.
- American Jets, Inc., a fixed-wing air ambulance provider based in Fort Pierce Florida, which operates a fleet of Learjet aircraft and provides worldwide air ambulance transport services.
- Blue Hawaiian Helicopters, Inc., a helicopter tour operator with 24 aircraft based in Hawaii, which is one of the world’s largest aerial tour operators and is the premier helicopter tour company in the State of Hawaii, offering a diverse portfolio of twelve scheduled tours on five of Hawaii’s six tourist islands.
- Counsel in developing and implementing legal strategy and drafting documents to make strategic acquisitions of businesses engaged in developing and manufacturing nacelle and thrust reverser systems, helicopter components, engine parts, heat exchangers, and other aircraft components. Successfully negotiated exclusive licensing agreements for key patents and know-how to develop, make, use, and sell major nacelle components such as the inlet cowl, cowl doors, cowling apron, inner core cowl, outer fan duct, engine mounts, thrust reversers, tail pipes, and anti-icing systems. Also negotiated exclusive consulting agreements with key inventors. As a result, the provider of aircraft components achieved a market leadership position in developing and manufacturing nacelle and thrust reverser systems for U.S. and foreign-made regional jets and general aviation aircraft.
Aviation Finance and Leasing – U.S. and Cross-Border
- U.S. and Cross-Border Aircraft Transactions: Converting Boeing 737-200 aircraft from Stage 2 to Stage 3 noise level compliance through a "737 Hush Kit" (engine noise suppression system) involved expensive upgrade of aircraft hardware and structural modifications to the airframe, engines, and Airplane Flight Manual. Fierce competitive forces required the developer-manufacturer to offer financing packages to purchasers of 737 Hush Kits. Acting as lead counsel, we successfully negotiated U.S. and cross border financings of 737 Hush Kit purchases through aircraft mortgages, lease security assignments, pledge agreements, financing leases, Ex Im Bank insurance protection, inter-creditor agreements, loan participations, and letters of credit. We protected the priorities of the financer, while solving legal concerns of competing aircraft lenders, insurers, lessors, lessees, and operators in the U.S., Algeria, Belgium, Channel Islands, El Salvador, France, Germany, Ireland, Mexico, Morocco, and Trinidad & Tobago. We also supervised foreign counsel to secure legal opinions and needed recordations of security instruments in foreign countries. DGS lawyers traveled extensively inside and outside the U.S. under tight deadlines for contract negotiations and drafting to closing.
- Helicopters and Fixed-Wing Aircraft: Our aviation lawyers routinely advise buyers, borrowers, sellers, and lenders in all aspects of financed and outright purchases and sales of business-jet aircraft, commercial aircraft such as Boeing 737 aircraft converted to cargo operations, and helicopters, often covered by the Cape Town Convention, often involving deregistration and export and import and registration, and often requiring International Registry filings.
Strategies for Owning and Operating Business Aircraft
- Maximizing Aircraft Use: We have developed corporate and tax structuring strategies for aircraft owners and operators that have maximized aircraft use (for business and personal uses), while complying with FAA regulations and, often inconsistent, tax regulations.
- Financing Leases and Conversions to Operating Leases:
- Counsel for financer-lessor in financing lease of four aircraft that had to be exported from Dubai and Hungary, and imported into the U.S. where the lessee and sublessee would change the configuration of the aircraft and put them into operation within the U.S. Acted as lead counsel on the contracting, registration, regulatory, and tax aspects of the transaction.
- Counsel for lessee in financing lease of charter jet aircraft. Worked through all financing aspects, deal documents to closing, and Cape Town Convention and International Registry filings.
- Have provided legal opinions for airline lessee in financing leases of Airbus commercial transport aircraft.
- Have also successfully negotiated transactions with U.S. and international parties, and solved problems surrounding letters of credit, bank guarantees, financings, conversion of financing leases to operating leases, airworthiness directives, insurance requirements, aircraft registration and de-registration in Bolivia, Canada, Hungary, Switzerland, the United Arab Emirates, and the U.S., and registration of international interests with the International Registry under the Cape Town Convention.
- Cargo Operations: Successfully negotiated wet and dry operating and financing leases with U.S. and Swiss lessors for cargo airline's fleet of aircraft used to provide lift to commercial airlines, FedEx, and UPS in Arabian Gulf and Middle East.
- Test Aircraft and Engines: Led contracting effort for lessee developer in operating lease of Boeing 737 aircraft needed to flight-test Stage 3 noise solutions. Successfully negotiated all legal aspects of aircraft operating leases on three separate occasions with Irish and U.S. lessors, as well as leases of additional engines needed for testing.
Joint Ventures in Aviation
Our aviation lawyers have developed expertise in complex joint venture relationships involving major aviation industry players:
- Cross-Border: Represented operator of FAA repair stations in North America and Asia who needed facility to capture repair business of 750 aircraft operators in Europe. Successfully negotiated all legal aspects of joint venture between station operator and GE Aircraft Engine Services Limited for facility in Wales to conduct repairs of structural aircraft components on aircraft powered by GE, Pratt & Whitney, and Rolls Royce engines. Acted as lead counsel for station operator and worked with GE's U.S. and U.K. counsel to draft all agreements and corporate documents for joint venture company and its repair facility in Wales (shareholder issues, intellectual property licensing, transition plans, asset transfers, environmental matters, sales representatives, component repairs, building construction, financing lease, realty issues, credit facility, guarantees, tax issues, FAA certification, and related corporate documents). Our lawyers also satisfied needs of lending institutions, financing lessor, industrial development board, environmental authorities, and antitrust authorities (European Commission and United Kingdom), while protecting interests of joint venture company and its owners.
- U.S.-based: Served as lead counsel on aviation-specific aspects and intellectual property issues for global producer of aero-engine bearings in a joint venture with GE’s aviation division to manufacture and repair bearings for GE’s engines in present and future large aircraft.
Aviation MRO and Manufacturing Contracts with Customers and Suppliers
Our aviation lawyers offer a wide variety of services for aviation contracts, including, negotiation of joint development and strategic partnership agreements, services and functions outsourcing agreements, and products, services, and resource procurement agreements. Our work for one client alone includes primary legal responsibility for the client's supply chain of over 1,000 suppliers and the client's Maintenance, Repair, and Overhaul (MRO) agreements for a large number of aircraft operators around the world. Representative aviation contracts we handle include:
- Aviation MRO agreements
- Aviation supply chain agreements at all tiers
- Aviation fuel supply agreements
- Aircraft charter agreements
- Agreements for handling hazardous materials
- Software licensing agreements
- Buying, selling, and leasing (financing and operating) of aircraft and aero engines
- Agreements covering goods and services of all kinds for aircraft (fixed-wing and rotorcraft)
- Warehousing, transportation, and distribution agreements
- Raw material and services procurement and supplier agreements
- Systems and premises maintenance agreements
- Equipment and hardware leasing agreements
- Sales agency and value added reseller agreements
- Outsourced warranty services agreements
- Joint development, manufacturing, marketing, and bundled distribution agreements
- Customer and contractor survey and quality assurance counseling agreements
- Power-by-the-hour fleet maintenance programs
- Fleet operator agreements
- Fleet maintenance authorization agreements
Airport Lease & Use/Access Agreements
Our lawyers have solid experience in dealing with these kinds of agreements, which tend to fall into certain patterns across airports inside and outside the U.S., whether the airport is controlled by a municipality, by an airport authority, or through other legal means. Our ability to work on this kind of agreement comes from our aviation, environmental, and real estate groups.
Aviation Product Development Programs
DGS lawyers have successfully negotiated all legal aspects of intellectual property agreements with U.S., Canadian, German, French, and U.K. airframe and engine manufacturers for development, certification, manufacture, and sale of the new nacelle and thrust reverser systems on regional jets and general aviation aircraft such as Dornier 328JET, Hawker 4000, Dassault Falcon 2000EX, Dornier 428JET, Gulfstream G200, Dassault Falcon SMS, and Gulfstream G500/G600. We have resolved legal concerns of the airframer, engine maker, and nacelle system developer on such issues as (i) ownership, licensing, use restrictions, and royalties for proprietary information, ideas, improvements, work product, inventions, patents, FAA, JAA, and EASA certification rights, and other forms of industrial property emerging from development programs, and (ii) remedies for infringing or improper copying, imitating, or reengineering of intellectual property inside and outside the U.S. States. Our lawyers have traveled extensively to Canada, Germany, and the United Kingdom for contract negotiations, drafting of deal documents, and closings.
New Repair Methods and PMAs
Have successfully guided MRO companies on legal aspects for development of new repair methods outside OEM manual limits and on obtaining PMAs when repair not possible; successfully negotiated repair-method licensing agreements with OEMs; successfully defended aviation companies against OEMs on right to develop new repair schemes and obtain PMAs.
Have successfully assisted aviation companies with legal aspects of development of new products for aircraft applications (fixed wing and rotorcraft) requiring STCs; successfully negotiated data licensing agreements with OEMs.
Bankruptcy Strategies and Special-Asset “Workouts” Involving Distressed Aviation Companies
We have served as lead counsel for creditors pursuing claims in and out of bankruptcy settings within North America, South America, and Europe. We have negotiated successful “workouts” to resolve competing interests of the bankruptcy trustee and other adverse parties in aviation. Our lawyers have been lead counsel in bankruptcy adversary proceedings and “workout” efforts of the following parties:
- Financer of noise-reduction equipment installed on wings and engines of Boeing 737-200 aircraft of bankrupt operators
- Financer-lessor of JT8D engines on Boeing 737-200 aircraft of bankrupt lessee
- Manufacturer of nacelles on regional jet when the airframer went bankrupt in Germany
- FAA certificated repair station seeking to enforce repair claims against airlines and airframers who filed bankruptcy in North America and Europe
- Developer of noise reduction system in F28 aircraft program when airframer went bankrupt in The Netherlands
- Operator-lessee of a fleet of leased aircraft trying to stop debtor-lessor from rejecting leases in bankruptcy
- Supplier of aviation products in bankruptcy adversary proceeding against DIP where dispute involved DIP’s effort to reject some purchase orders and assume others under a master purchase agreement covering aircraft products
Sales & Use Tax Planning
Liability for state and local sales and use taxes is a key consideration in acquiring, owning, and operating an aircraft. We advise clients on how to structure aircraft acquisitions so as to take delivery in a jurisdiction that either has no sales tax or a “fly away” exemption from sales tax. We can also advise on the use tax consequences of ownership/operation and on various techniques to minimize use taxes.
The concept behind a like-kind exchange of aircraft is simple enough. But the permutations that arise in practice and the counter-intuitive rules from the aviation and tax regimes often lead to complications and traps even for experienced players, especially when the transactions must proceed from start to finish in a very short time. We have resolved these complications for our clients in a manner that avoids the traps even when things must move very quickly.
Compliance with Regulations Relating to Personal Use of Aircraft
Federal income tax regulations regarding the personal use of aircraft require extensive record-keeping to substantiate the amount of operating expenses that are deductible. We have prepared procedures for complying with these regulations and have advised clients on how to implement an effective record-keeping system to substantiate expenses while complying with non-tax regulations governing aircraft operations.
Structuring of International Aviation-Related Organizations
International business operations require extensive planning and structuring to be tax efficient. Generally, this requires taking into account the creditability and deductibility of foreign taxes, the availability of benefits under bilateral tax treaties, and the structuring of entities in foreign jurisdictions to minimize foreign income and withholding taxes. We advise a wide variety of clients, including aviation-related service providers, with overseas operations.
Antitrust Compliance Programs
We have instituted and maintained programs of antitrust compliance under U.S. and foreign antitrust laws for aviation operations, including fashioning ongoing legal strategies for minimizing antitrust risks on price discrimination, refusals to sell, exclusive dealing, territorial restrictions, sales representative terminations, vertical price restraints, and non-competition commitments. We have also performed Hart-Scott-Rodino and foreign antitrust filings in aviation mergers and acquisitions.
Government Contracting (U.S. and Foreign) for Aircraft Products & Services
Our team handles all aspects of prime government contracts and subcontracts from intake and processing to signature, and then flow down and legal performance throughout the “life of the program.” We understand how government contracts differ from civilian contracts to assist our clients in gaining competitive advantages. We regularly advise on the myriad and ever-changing compliance requirements.
- Represented aerospace defense contractor in the negotiation, successful award, and administration of the Department of Defenses’ procurement of goods and services.
- Worked on a project with U.S. Government prime contractor and lower tier subcontractors for foreign military logistics operations to airlift fresh fruits and vegetables from Dubai to U.S. forces in Afghanistan.
- Counseled manufacturer in asserting rights in intellectual property when used, disclosed, and created in the performance of government contracts and subcontracts.
- Managed risk and handled contract novations in mergers, acquisitions, and divestitures involving government contractors.
Litigation & Arbitration
As a law firm, we have tried many state and federal, civil, and criminal cases for clients of all sizes before juries, courts, arbitrators, and administrative hearings officers – in Colorado and throughout the nation. We have also conducted arbitrations inside the U.S. and abroad. Our trial lawyers conduct litigation planning, all forms of pre-trial motion and discovery practice, mediation, and other alternative dispute resolution, trials, and appeals at all levels. We are proud of the substantial record of our trial lawyers – including many former prosecutors and public defenders – in trying lawsuits in front of juries and judges. Extensive jury trial experience gives DGS trial lawyers an advantage in preparing cases for trial and negotiating favorable settlements.
Our litigators represent clients in a variety of aviation disputes, including antitrust, bankruptcy, breach of contract, and intellectual property.
Our specialized knowledge about helicopters and fixed wing aircraft sets us apart from other litigation firms when it comes to aviation business disputes.
Here are some examples where DGS attorneys have acted as trial counsel in aviation litigation and arbitration matters:
- Noise Reduction, Inc., and Sound Solution, L.P., v. NORDAM Corporation, Siegfried, Inc., NORDAM (a general partnership), United Technologies Corporation, Pratt & Whitney Group, Commercial Engine Business, and The Boeing Company, Boeing Commercial Airplane Co., No. 90 C 6497 (N.D. Ill. 1990) (DGS lawyer was on NORDAM defense team in four-year monopoly litigation where plaintiff sought more than $750 million in damages on claims that Boeing, Pratt & Whitney, and NORDAM as the developer of the noise-reduction "hush kit" solution monopolized the market for Stage 3 noise compliance of JT8D powered B737-200 aircraft; before case settled, four litigants took over 100 depositions (12 experts) with over 1,000,000 hardcopy pages of documents produced).
- The NORDAM Group, Inc. v. Pratt & Whitney Canada Corp., Jean-Pierre Lair, and Aeronautical Concept of Exhaust, LLC, 09-CV-245 CVE TLW (U.S. Dist. Ct. N. D. OK, filed Apr. 24, 2009)(intellectual property dispute)
- The NORDAM Group, Inc. v. Pratt & Whitney Canada Corp., Jean-Pierre Lair, and Aeronautical Concept of Exhaust, LLC, 500-17-049912-093 (Superior Court, Province of Quebec, District of Montreal, Canada; filed Apr. 27, 2009)(intellectual property dispute)
- The NORDAM Group, Inc. v. The Cessna Aircraft Company, 11-CV-244 CVE PJC (US Dist. Ct. N. D. OK, filed Apr. 21, 2011) (followed by arbitration) (intellectual property dispute)
- Arbitration involving termination claim when aircraft program ended
- Extensive multi-year legal and arbitration proceedings between partners in two foreign joint ventures: legal action initiated in London commercial court; arbitration initiated in Switzerland; and lawsuit initiated in Washington D.C. federal court. These all arose from joint ventures in Iraq involving cargo operations for international air cargo carrier and for the U.S. military. The JV for the U.S. military involved ground cargo operations as an extension of the air cargo operations already conducted by our client in delivering cargo to U.S. military bases in Iraq. The JV for the international air cargo carrier involved civil cargo movements in Iraq.
Extensive Contacts With Foreign Experts (Legal and Non-Legal) In Six Continents
Over the years, our aviation clients have chosen a presence in over 60 countries, so we have working relationships with local experts (legal and non-legal) to support acquisitions, divestitures, mergers, joint venture formations, leases, and financings in many countries.
We have also supervised U.S. and foreign patent counsel in prosecuting and maintaining over 75 patents in the U.S. and other countries for aircraft nacelles, thrust reversers, and noise suppression devices. We have also led efforts to prosecute and defend patent infringement claims covering these products.