Aircraft owners who form limited liability companies (LLCs) typically believe that this structure will shield them from personal liability. However, that reasonable expectation could be incorrect given a recent Texas Supreme Court decision in Texas v. Morello (Morello).
In Morello, the sole member of an LLC found that his LLC did not protect him from personal liability for his and its violations of the Texas Water Code. While unrelated to aviation, this ruling also could affect members and others standing behind LLCs that own aircraft. Morello could hand the FAA, as well as other state and federal governmental agencies, a powerful tool to levy fines and penalties on LLCs, their pilots, members, and other officials for violations of the Federal Aviation Regulations (FARs).
David G. Mayer is a member of the global Aviation Practice Group at Shackelford, McKinley & Norton in Dallas, which handles private aircraft matters, including regulatory compliance, tax planning, purchases, sales, leasing and financing, risk management, insurance, aircraft management and operations, hangar leasing, and related corporate work. Mayer frequently represents corporations and high- and ultra-high-net worth individuals and other aircraft owners, flight departments, lessees, borrowers, operators, sellers, purchasers, corporations and managers, as well as lessors and lenders. He can be contacted at [email protected].
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