1 Advantages to aircraft financiers

For an aircraft financier, the virtues of the Cape Town Convention and its Aircraft Equipment Protocol (together Cape Town) are that it aims to:  

The Irish Minister for Transport, Tourism and Sport, Shane Ross TD ("the Minister"), announced on 10 May 2017 that the Government has signed an Order pursuant to the State Airports (Shannon Group) Act 2014 implementing the provisions of “Alternative A” of the Aircraft Protocol to the Cape Town Convention on International Interests in Mobile Equipment into Irish law.

Alternative A of the Cape Town Convention [1] now has the force of law in Ireland, following signing of an Order by the Irish Government on 10 May 2017.

The Cape Town Convention was designed to establish a uniform set of rules to provide greater certainty and predictability around the protection, prioritisation and enforcement of rights in aircraft and aircraft engines. The Convention has a commercial objective, namely to facilitate efficient forms of asset-based financing.

Alternative A

Ireland is a key location for aircraft financing and leasing structures and is the headquarters for many leading aircraft and engine lessors worldwide.

CAPITAL MARKETS BULLETINは、キャピタルマーケッツ関連の最新法務・新規案件についてご紹介するニュースレターです。

In 2010 Malta embarked on an ambitious project to introduce the Aircraft Registration Act (the “ARA”) and to accede to the Cape Town Convention and its Aircraft Protocol. A few years later, the growing presence of AOC holders in Malta and the increase in aircraft registered in the National Aircraft Register is testament to the success story of the ARA.

This notwithstanding, there still is and will always be room for improvement, as shown by the recent Act to amend the ARA which became law in October 20161. The improvements affect four broad categories:

The defendant guaranteed payment of the price of equipment sold by the claimant to the defendant’s subsidiary. The claimant then entered into agreements with the subsidiary and various finance companies under which title in certain of the goods passed to the finance companies in return for payment of part of the relevant purchase price. The subsidiary paid some of the purchase price of the goods, as did the finance companies but the balance remained unpaid when the subsidiary went into liquidation. The claimant claimed on the guarantee and issued proceedings.

In a decision that will be welcomed both by second-ranking secured creditors and by administrators, the Court of Appeal recently held that a second-ranking floating charge (SRFC) was still capable of being a qualifying floating charge for the purposes of Schedule B1 of the Insolvency Act 1986 despite the earlier crystallisation of a prior-ranking floating charge (PRFC). In addition, the SRFC was capable of being enforceable notwithstanding the fact that there were no assets of the chargor which were not covered by the PRFC.

People’s Capital and Leasing Corp. v. BIG3D, Inc. (In re BIG3D, Inc.), 438 B.R. 214 (9th Cir. BAP 2010)

CASE SNAPSHOT

On July 8, 2013, Ohio’s 5th District Court of Appeals issued an opinion that will be of interest to commercial equipment lessors in Ohio.  This case concerns the commercial lease of a beverage caddy and the status of the “middle man” lessee when the vendor undergoes bankruptcy.