Acceptance of Transfer Statements Under UCC 9-616, for Recording in Aircraft Records, 67007-67009 [06-9250]
Download as PDF
<![CDATA[
Federal Register / Vol. 71, No. 222 / Friday, November 17, 2006 / Notices
provide annual MIS testing information,
and communicating with entities
subject to the program regulations. In
addition, the information is used to
ensure that appropriate action is taken
in regard to crew members and other
safety-sensitive employees who have
tested positive for drugs or alcohol, or
have refused to submit to testing.
ADDRESSES: Send comments to the
FAA at the following address: Ms. Carla
Mauney, Room 712, Federal Aviation
Administration, Strategy and
Investment Analysis Division, AIO–20,
800 Independence Ave., SW.,
Washington, DC 20591.
Comments are invited on: Whether
the proposed collection of information
is necessary for the proper performance
of the functions of the Department,
including whether the information will
have practical utility; the accuracy of
the Department’s estimates of the
burden of the proposed information
collection; ways to enhance the quality,
utility and clarity of the information to
be collected; and ways to minimize the
burden of the collection of information
on respondents, including the use of
automated collection techniques or
other forms of information technology.
Issued in Washington, DC, on November
13, 2006.
Carla Mauney,
FAA Information Collection Clearance
Officer, Strategy and Investment Analysis
Division, AIO–20.
[FR Doc. 06–9247 Filed 11–16–06; 8:45 am]
BILLING CODE 4910–13–M
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
Noise Exposure Map Notice;
Burlington International Airport, South
Burlington VT
Federal Aviation
Administration, DOT.
ACTION: Notice.
AGENCY:
The Federal Aviation
Administration (FAA) announces its
determination that the noise exposure
maps for Burlington International
Airport, as submitted by the City of
Burlington under the provisions of Title
I of the Aviation Safety and Noise
Abatement Act of 1979 (Pub. L. 96–193)
and 14 CFR part 150, are in compliance
with applicable requirements.
DATES: Effective Date: The effective date
of the FAA’s determination on the noise
exposure maps is November 6, 2006.
FOR FURTHER INFORMATION CONTACT:
Richard Doucette, Federal Aviation
Administration, New England Region
jlentini on PROD1PC65 with NOTICES
SUMMARY:
VerDate Aug<31>2005
16:31 Nov 16, 2006
Jkt 211001
Airports Division, 12 New England
Executive Park, Burlington,
Massachusetts 01803.
SUPPLEMENTARY INFORMATION: This
notice announces that the FAA funds
that the noise exposure maps submitted
for Burlington International Airport are
in compliance with applicable
requirements of Part 150, effective
November 6, 2006.
Under Section 103 of Title I of the
Aviation Safety and Noise Abatement
Act of 1979 (hereinafter referred to as
‘‘the Act’’), an airport operator may
submit to the FAA noise exposure maps
that meet applicable regulations and
that depict non-compatible land uses as
of the date of submission of such maps,
a description of projected aircraft
operations, and the ways in which such
operations will affect such maps. The
Act requires such maps to be developed
in consultation with interested and
affected parties in the local community,
government agencies, and persons using
the airport.
An airport operator who has
submitted such noise exposure maps
that are found by FAA to be in
compliance with the requirements of
Federal Aviation Regulation (FAR) Part
150, promulgated pursuant to Title I of
the Act, may submit a noise
compatibility program for FAA approval
that sets forth the measures the operator
has taken, or proposes, for the
introduction of additional noncompatible uses.
The FAA has completed its review of
the noise exposure map and related
descriptions submitted by the City of
Burlington. The specific maps under
consideration were ‘‘Figure 1. 2006
Existing Condition Noise Exposure
Map’’ and ‘‘Figure 2. 2011 Forecast
Condition Noise Exposure Map’’ in the
submission. The FAA has determined
that these maps for Burlington
International Airport are in compliance
with applicable requirements. This
determination is effective on November
6, 2006.
FAA’s determination on an airport
operator’s noise exposure maps is
limited to a finding that the maps were
developed in accordance with the
procedures contained in Appendix A of
FAR Part 150. Such determination does
not constitute approval of the
applicant’s data, information or plans,
or a commitment to approve a noise
compatibility program or to fund the
implementation of that program.
If questions arise concerning the
precise relationship of specific
properties to noise exposure contours
depicted on a noise exposure map
submitted under Section 103 of the Act,
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
67007
it should be noted that the FAA is not
involved in any way in determining the
relative locations of specific properties
with regard to the depicted noise
contours, or in interpreting the noise
exposure maps to resolve questions
concerning, for example, which
properties should be covered by the
provisions of Section 107 of the Act.
These functions are inseparable from
the ultimate land use control and
planning responsibilities of local
government. These local responsibilities
are not changed in any way under Part
150 or through FAA’s review of a noise
exposure map. Therefore, the
responsibility for the detailed
overlaying of noise exposure contours
onto the map depicting properties on
the surface rests exclusively with the
airport operator that submitted the map
or with those public agencies and
planning agencies with which
consultation is required under Section
103 of the Act. The FAA has relied on
the certification by the airport operator,
under Section 150.21 of FAR Part 150,
that the statutorily required consultation
has been accomplished.
Copies of the noise exposure maps are
available for examination at the
following locations: Engineering Office,
Room 295 Terminal Building,
Burlington International Airport, 1200
Airport Drive, South Burlington VT,
Federal Aviation Administration, New
England Region, Airports Division, 12
New England Executive Park,
Burlington, Massachusetts 01803.
Questions may be directed to the
individual named above under the
heading: FOR FURTHER INFORMATION
CONTACT.
Issued in Burlington, Massachusetts on
November 6, 2006.
LaVerne Reid,
Manager, Airports Division.
[FR Doc. 06–9249 Filed 11–16–06; 8:45 am]
BILLING CODE 4910–13–M
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
Acceptance of Transfer Statements
Under UCC 9–616, for Recording in
Aircraft Records
ACTION:
Notice.
SUMMARY: This notice is issued by the
Federal Aviation Administration (FAA)
Chief Counsel to advise interested
parties of the FAA’s acceptance of
transfer statements filed with the FAA
Aircraft Registry that are executed under
the Uniform Commercial Code, section
9–619, as adopted by the various states.
E:\FR\FM\17NON1.SGM
17NON1
67008
Federal Register / Vol. 71, No. 222 / Friday, November 17, 2006 / Notices
jlentini on PROD1PC65 with NOTICES
FOR FURTHER INFORMATION CONTACT:
Joseph R. Standell, Aeronautical Center
Counsel, AMC–7, Federal Aviation
Administration, P.O. Box 25082,
Oklahoma City, OK 73125–4904, or call
(405) 954–3296.
SUPPLEMENTARY INFORMATION: By
Memorandum dated September 7, 2006,
Mr. Dean Gerber, Vedder, Price,
Kaufman & Kammholz, P.C., wrote to
the FAA about a default on a secured
transaction which resulted in
foreclosure of the owner/lessor’s interest
in several aircraft. In addition to the
secured transaction, the aircraft are
subject to leases from the defaulting
owner, as lessor to a third party
certificated air carrier. The foreclosing
party wants the FAA aircraft records to
reflect its interest in the leases so that
transfer of lessor’s rights to a new
owner/lessor can be accomplished. The
defaulting party is unwilling to deliver
an assignment of the leases to the
foreclosing party. Absent an assignment
of lessor’s rights in the leases, the
foreclosing party has been unable to
cause FAA aircraft records to reflect its
rights in the leases.
The Administrator of the FAA is
charged in 49 U.S.C. 44107 with
establishing a system for recording
conveyances that affect an interest in a
U.S. civil aircraft. Part 49 of the Federal
Aviation Regulations—Recording of
Aircraft Titles and Security Documents
provides that leases are conveyances
(see 49 U.S.C. 40101(a)(19), 14 CFR
49.17(a)(1)). Section 39.17(d) of the
Regulations provides for recording of
consensual assignments of conveyances
such as security documents and leases.
However, in default situations, the
Regulations only provide for recording
of a Certificate of Repossession, FAA
Form 8050–4, or its equivalent,
addressing ownership of an aircraft (14
CFR 47.11(b)). When the repossessed
aircraft remains subject to a lease, there
is no apparent way for a repossessing
party to record its interest in the lease.
To address this problem, Mr. Gerber’s
memorandum included a proposed
transfer statement under the Uniform
Commercial Code (UCC) section 9–619
as a mechanism by which a foreclosing
secured party can cause the record to
reflect its rights in leases.
Section 9–619 of the UCC provides
that a properly presented transfer
statement ‘‘entitles the transferee to the
transfer of record of all rights of the
debtor in the collateral specified in the
statement in any official filing,
recording, * * * system * * *’’
Further, section 9–619 provides that
upon proper presentation, the official
responsible for maintaining the system
VerDate Aug<31>2005
16:31 Nov 16, 2006
Jkt 211001
shall accept the transfer statement and
promptly amend its records to reflect
the transfer. That ‘‘official’’ in the
context of Mr. Gerber’s request would be
the FAA Aircraft Registry.
The FAA has determined that in
appropriate circumstances, transfer
statements may be recordable
instruments. However, users are
reminded that the validity of transfer
statements is determined under the
applicable state law, i.e., State
adoptions of Section 9–619 of the UCC.
Accordingly, the FAA publishes, as
an attachment, its response to Mr.
Gerber.
Issued in Washington, DC, on November
13, 2006.
Rebecca MacPherson,
Assistant Chief Counsel for Regulations.
Attachment
October 6, 2006.
Dean A. Gerber, Esq.
Vedder, Price, Kaufman & Kammholz,
P.C., 222 North LaSalle Street,
Chicago, IL 60601.
Dear Mr. Gerber:
Legal Opinion—Lease Assignments
Through the Use of Transfer Statements
This responds to your request for an
opinion whether the Federal Aviation
Administration (FAA) will consider
utilization of a transfer statement for
purposes of assigning (on the record) the
rights of the aircraft owner in existing
leases to the Indenture Trustee; and
whether a transfer statement under
Uniform Commercial Code section 9–
619 is eligible for recording as a standalone document.
As an attachment to your request, you
provided a draft proposed Transfer
Statement and its Attachment A. The
proposed Transfer Statement appears to
contain all of the provisions required by
Uniform Commercial Code Section 9–
619 including the statement ‘‘By reason
of such past-default remedies, the
Indenture Trustee has acquired the
rights of the Owner Trustee as lessor
under the Existing Lease and is now
considered the ‘Lessor’ under the
Existing Lease * * *.’’
Briefly, the facts underlying your
request are as follows: The registered
owner of the aircraft has defaulted
under a recorded security agreement.
The collateral under that security
agreement is the aircraft and various
leases of the aircraft to a certificated air
carrier, as lessee. You acknowledge that
ownership of the aircraft can be affected
by repossession and foreclosure
evidenced by the filing of a Certificate
of Repossession under 14 CFR § 47.11.
However, your client seeks a way to
PO 00000
Frm 00102
Fmt 4703
Sfmt 4703
evidence of record its accession to the
rights of the registered owner (the
Lessor) in the leases and subsequently
be able to record an assignment of that
interest from the Indenture Trustee to
the new aircraft owner.
By way of background, the
Administrator of the Federal Aviation
Administration is charged with
establishing a system for recording
conveyances, including leases that affect
an interest in a U.S. civil aircraft. (See
49 U.S.C. 40102(a)(19), 44107; 14 CFR
49.17(a)(1).)
Part 49 of the Federal Aviation
Regulations contains provisions for
recording assignments of those
conveyances. However, where such
assignment is not feasible as sometimes
occurs in a default situation, there are
no regulatory provisions to provide
notice to system users of the transfer
when the collateral involved is a lease.
Although a transfer statement has
definite structure and effect it is not the
type of assignment contemplated by 14
CFR 49.17(d)(3).1
Recognizing that dilemma, the
drafters of the Uniform Commercial
Code (UCC) introduced a mechanism by
which a repossessing party can evidence
its rights in collateral such as leases.
UCC section 9–619 Transfer of Record
or Legal Title,2 introduces the transfer
statement as follows:
(a) [‘‘Transfer statement.’’] In this section,
‘‘transfer statement’’ means a record
authenticated by a secured party stating:
(1) That the debtor has defaulted in
connection with an obligation secured by
specified collateral;
(2) That the secured party has exercised its
post-default remedies with respect to the
collateral;
(3) That, by reason of the exercise, a
transferee has acquired the rights of the
debtor in the collateral; (emphasis added)
and
(4) The name and mailing address of the
secured party, debtor, and transferee.
(b) [Effect of transfer statement.] A transfer
statement entitles the transferee to the
transfer of record of all rights of the debtor
in the collateral specified in the statement in
any official filing, recording, registration, or
certificate-of-title system covering the
collateral. If a transfer statement is presented
with the applicable fee and request form to
1 14 CFR 49.17(d)(3)—The following rules apply
to conveyances executed for security purposes and
assignments thereof: An assignment of an interest
in a security agreement must be signed by the
assignor and, unless it is attached to and is a part
of the original agreement, must describe the
agreement in sufficient detail to identify it,
including its date, the names of the parties, the date
of FAA recording, and the recorded conveyance
number.
2 The 2000 revisions to Article 9 have been
adopted by all 50 states, the District of Columbia
and the Virgin Islands (ULA UCC Refs & Annos,
Westlaw).
E:\FR\FM\17NON1.SGM
17NON1
Federal Register / Vol. 71, No. 222 / Friday, November 17, 2006 / Notices
jlentini on PROD1PC65 with NOTICES
the official or office responsible for
maintaining the system, the official or office
shall:
(1) Accept the transfer statement;
(2) Promptly amend its records to reflect
the transfer; (emphasis added) and
(3) If applicable, issue a new appropriate
certificate of title in the name of the
transferee.
(c) [Transfer not a disposition; no relief of
secured party’s duties.] A transfer of the
record or legal title to collateral to a secured
party under subsection (b) or otherwise is not
of itself a disposition of collateral under this
article and does not of itself relieve the
secured party of its duties under this article.
I have also considered the Official
Comments of the UCC drafters wherein they
explain the intent of UCC 9–916:
Transfer of Record or Legal Title. Potential
buyers of collateral that is covered by a
certificate of title (e.g., an automobile) or is
subject to a registration system (e.g., a
copyright) typically require as a condition of
their purchase that the certificate or registry
reflect their ownership. In many cases, this
condition can be met only with the consent
of the record owner. If the record owner is
the debtor and, as may be the case after the
default, the debtor refuses to cooperate, the
secured party may have great difficulty
disposing of the collateral. (emphasis added)
Subsection (b) provides a simple
mechanism for obtaining record or legal title,
for use primarily when other law does not
provide one. (emphasis added) Of course, use
of this mechanism will not be effective to
clear title to the extent that subsection (b) is
preempted by federal law. Subsection (b)
contemplates a transfer of record or legal title
to a third party, following a secured party’s
exercise of its disposition or acceptance
remedies under this Part, as well as a transfer
by a debtor to a secured party prior to the
secured party’s exercise of those remedies.
Under subsection (c), a transfer of record or
legal title (under subsection (b) or under
other law) to a secured party prior to the
exercise of those remedies merely puts the
secured party in a position to pass legal or
record title to a transferee at foreclosure. A
secured party who has obtained record or
legal title retains its duties with respect to
enforcement of its security interest, and the
debtor retains its rights as well.
3. Title-Clearing Systems Under Other
Law. Applicable non-UCC law (e.g., * * *,
federal registry rules, or the like) (emphasis
added) may provide a means by which the
secured party may obtain or transfer record
or legal title for the purpose of a disposition
of the property under this Article. The
mechanism provided by this section is in
addition to any title-clearing provision under
law other than this Article.
After due consideration of these facts,
provisions and comments, it is my
opinion that the FAA will consider
utilization of a transfer statement as
contemplated by Section 9–619 of the
Uniform Commercial Code for purposes
of transferring the rights of the aircraft
owner, as Lessor, to the Indenture
Trustee in existing leases.
VerDate Aug<31>2005
16:31 Nov 16, 2006
Jkt 211001
Further, your proposed transfer
statement is eligible for recording as a
stand-alone document because it is a
conveyance affecting an interest in a
civil aircraft of the United States in that
it affects an interest in a recorded lease
between Wells Fargo Bank and
Northwest Airlines concerning
operational control of aircraft.
Be advised that for purposes of
transferring ownership of an aircraft
FAA will not consider a transfer
statement a substitute for a Certificate of
Repossession or its equivalent under 14
CFR 47.11
Sincerely,
Joseph R. Standell
Aeronautical Center Counsel
[FR Doc. 06–9250 Filed 11–16–06; 8:45 am]
BILLING CODE 4910–13–M
DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety
Administration
[Docket No. FMCSA–2006–25886]
State Enforcement of Household
Goods Consumer Protection
Federal Motor Carrier Safety
Administration, DOT.
ACTION: Notice.
AGENCY:
SUMMARY: The Safe, Accountable,
Flexible, Efficient Transportation Equity
Act: A Legacy for Users (SAFETEA–LU)
gives State household goods regulatory
authorities and State attorneys general
the right to enforce certain consumer
protection provisions that apply to
individual shippers and are related to
interstate movement of the goods. This
notice specifies the Federal statutory
and regulatory provisions that States
may enforce.
DATES: The policy in this notice is
effective as of the enactment of
SAFETEA–LU, August 10, 2005. State
household goods regulatory authorities
and State attorneys general may enforce
the statutory provisions and FMCSA
regulations identified in this notice for
actions on or after that date.
FOR FURTHER INFORMATION CONTACT: Ms.
Dorothea Grymes, Household Goods
Team, Office of Enforcement and
Program Delivery, Federal Motor Carrier
Safety Administration, Department of
Transportation, 400 Seventh St., SW.,
Room 8310, Washington, DC 20590–
0001. (202) 385–2400. Office hours are
from 7:45 a.m. to 4:15 p.m., e.t., Monday
through Friday, except Federal holidays.
SUPPLEMENTARY INFORMATION: On August
10, 2005, the President signed the Safe,
Accountable, Flexible, and Efficient
PO 00000
Frm 00103
Fmt 4703
Sfmt 4703
67009
Transportation Equity Act: A Legacy for
Users (SAFETEA–LU) (Public Law 109–
59). Section 4206 of SAFETEA–LU
amends Title 49 of the United States
Code (U.S.C.) by adding two new
sections, 14710 and 14711, to address
the enforcement of the consumer
protection provisions of Title 49 and
related regulations applicable to the
delivery and transportation of
household goods in interstate or foreign
commerce. Before the passage of
SAFETEA–LU, the Federal government
was responsible for enforcing these
statutes and regulations. Section 14710
extends to State agencies that regulate
the movement of intrastate household
goods the authority to ‘‘enforce the
consumer protection provisions of this
title [Title 49] that apply to individual
shippers, as determined by the Secretary
[of the U.S. Department of
Transportation], and are related to the
delivery and transportation of
household goods in interstate
commerce.’’ Section 14711 gives State
attorneys general the authority to bring
a civil action or impose civil penalties
in the U.S. district courts to enforce the
consumer protection provisions that
apply to individual shippers and are
related to the delivery and
transportation of household goods in
interstate or foreign commerce.
Section 4202 of SAFETEA–LU
amended 49 U.S.C. 13102 to define
‘‘individual shipper’’ as follows:
The term ‘‘individual shipper’’ means any
person who—
(A) Is the shipper, consignor, or consignee
of a household goods shipment;
(B) Is identified as the shipper, consignor,
or consignee on the face of the bill of lading;
(C) Owns the goods being transported; and
(D) Pays his or her own tariff transportation
charges.
FMCSA has determined that the
States, under sections 14710 and 14711,
may enforce the following statutory
provisions and FMCSA regulations 1
immediately:
Statutes
1. Tariff requirement for certain
transportation, 49 U.S.C. 13702.
Household goods (HHG) carriers must
have tariffs covering transportation and
related services and must charge in
accordance with their tariff. (Tariffs are
the rates charged for services and the
service terms.) The carrier must give
notice of availability of the tariff to
individual shippers and must make it
available for inspection to shippers
upon reasonable request.
1 The brief description accompanying each item
listed below is for informational purposes only and
is not intended to be a definitive interpretation of
legal requirements.
E:\FR\FM\17NON1.SGM
17NON1
]]>Agencies
[Federal Register Volume 71, Number 222 (Friday, November 17, 2006)]
[Notices]
[Pages 67007-67009]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-9250]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
Acceptance of Transfer Statements Under UCC 9-616, for Recording
in Aircraft Records
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This notice is issued by the Federal Aviation Administration
(FAA) Chief Counsel to advise interested parties of the FAA's
acceptance of transfer statements filed with the FAA Aircraft Registry
that are executed under the Uniform Commercial Code, section 9-619, as
adopted by the various states.
[[Page 67008]]
FOR FURTHER INFORMATION CONTACT: Joseph R. Standell, Aeronautical
Center Counsel, AMC-7, Federal Aviation Administration, P.O. Box 25082,
Oklahoma City, OK 73125-4904, or call (405) 954-3296.
SUPPLEMENTARY INFORMATION: By Memorandum dated September 7, 2006, Mr.
Dean Gerber, Vedder, Price, Kaufman & Kammholz, P.C., wrote to the FAA
about a default on a secured transaction which resulted in foreclosure
of the owner/lessor's interest in several aircraft. In addition to the
secured transaction, the aircraft are subject to leases from the
defaulting owner, as lessor to a third party certificated air carrier.
The foreclosing party wants the FAA aircraft records to reflect its
interest in the leases so that transfer of lessor's rights to a new
owner/lessor can be accomplished. The defaulting party is unwilling to
deliver an assignment of the leases to the foreclosing party. Absent an
assignment of lessor's rights in the leases, the foreclosing party has
been unable to cause FAA aircraft records to reflect its rights in the
leases.
The Administrator of the FAA is charged in 49 U.S.C. 44107 with
establishing a system for recording conveyances that affect an interest
in a U.S. civil aircraft. Part 49 of the Federal Aviation Regulations--
Recording of Aircraft Titles and Security Documents provides that
leases are conveyances (see 49 U.S.C. 40101(a)(19), 14 CFR
49.17(a)(1)). Section 39.17(d) of the Regulations provides for
recording of consensual assignments of conveyances such as security
documents and leases. However, in default situations, the Regulations
only provide for recording of a Certificate of Repossession, FAA Form
8050-4, or its equivalent, addressing ownership of an aircraft (14 CFR
47.11(b)). When the repossessed aircraft remains subject to a lease,
there is no apparent way for a repossessing party to record its
interest in the lease. To address this problem, Mr. Gerber's memorandum
included a proposed transfer statement under the Uniform Commercial
Code (UCC) section 9-619 as a mechanism by which a foreclosing secured
party can cause the record to reflect its rights in leases.
Section 9-619 of the UCC provides that a properly presented
transfer statement ``entitles the transferee to the transfer of record
of all rights of the debtor in the collateral specified in the
statement in any official filing, recording, * * * system * * *''
Further, section 9-619 provides that upon proper presentation, the
official responsible for maintaining the system shall accept the
transfer statement and promptly amend its records to reflect the
transfer. That ``official'' in the context of Mr. Gerber's request
would be the FAA Aircraft Registry.
The FAA has determined that in appropriate circumstances, transfer
statements may be recordable instruments. However, users are reminded
that the validity of transfer statements is determined under the
applicable state law, i.e., State adoptions of Section 9-619 of the
UCC.
Accordingly, the FAA publishes, as an attachment, its response to
Mr. Gerber.
Issued in Washington, DC, on November 13, 2006.
Rebecca MacPherson,
Assistant Chief Counsel for Regulations.
Attachment
October 6, 2006.
Dean A. Gerber, Esq.
Vedder, Price, Kaufman & Kammholz, P.C., 222 North LaSalle Street,
Chicago, IL 60601.
Dear Mr. Gerber:
Legal Opinion--Lease Assignments Through the Use of Transfer Statements
This responds to your request for an opinion whether the Federal
Aviation Administration (FAA) will consider utilization of a transfer
statement for purposes of assigning (on the record) the rights of the
aircraft owner in existing leases to the Indenture Trustee; and whether
a transfer statement under Uniform Commercial Code section 9-619 is
eligible for recording as a stand-alone document.
As an attachment to your request, you provided a draft proposed
Transfer Statement and its Attachment A. The proposed Transfer
Statement appears to contain all of the provisions required by Uniform
Commercial Code Section 9-619 including the statement ``By reason of
such past-default remedies, the Indenture Trustee has acquired the
rights of the Owner Trustee as lessor under the Existing Lease and is
now considered the `Lessor' under the Existing Lease * * *.''
Briefly, the facts underlying your request are as follows: The
registered owner of the aircraft has defaulted under a recorded
security agreement. The collateral under that security agreement is the
aircraft and various leases of the aircraft to a certificated air
carrier, as lessee. You acknowledge that ownership of the aircraft can
be affected by repossession and foreclosure evidenced by the filing of
a Certificate of Repossession under 14 CFR Sec. 47.11. However, your
client seeks a way to evidence of record its accession to the rights of
the registered owner (the Lessor) in the leases and subsequently be
able to record an assignment of that interest from the Indenture
Trustee to the new aircraft owner.
By way of background, the Administrator of the Federal Aviation
Administration is charged with establishing a system for recording
conveyances, including leases that affect an interest in a U.S. civil
aircraft. (See 49 U.S.C. 40102(a)(19), 44107; 14 CFR 49.17(a)(1).)
Part 49 of the Federal Aviation Regulations contains provisions for
recording assignments of those conveyances. However, where such
assignment is not feasible as sometimes occurs in a default situation,
there are no regulatory provisions to provide notice to system users of
the transfer when the collateral involved is a lease. Although a
transfer statement has definite structure and effect it is not the type
of assignment contemplated by 14 CFR 49.17(d)(3).\1\
---------------------------------------------------------------------------
\1\ 14 CFR 49.17(d)(3)--The following rules apply to conveyances
executed for security purposes and assignments thereof: An
assignment of an interest in a security agreement must be signed by
the assignor and, unless it is attached to and is a part of the
original agreement, must describe the agreement in sufficient detail
to identify it, including its date, the names of the parties, the
date of FAA recording, and the recorded conveyance number.
---------------------------------------------------------------------------
Recognizing that dilemma, the drafters of the Uniform Commercial
Code (UCC) introduced a mechanism by which a repossessing party can
evidence its rights in collateral such as leases. UCC section 9-619
Transfer of Record or Legal Title,\2\ introduces the transfer statement
as follows:
---------------------------------------------------------------------------
\2\ The 2000 revisions to Article 9 have been adopted by all 50
states, the District of Columbia and the Virgin Islands (ULA UCC
Refs & Annos, Westlaw).
(a) [``Transfer statement.''] In this section, ``transfer
statement'' means a record authenticated by a secured party stating:
(1) That the debtor has defaulted in connection with an
obligation secured by specified collateral;
(2) That the secured party has exercised its post-default
remedies with respect to the collateral;
(3) That, by reason of the exercise, a transferee has acquired
the rights of the debtor in the collateral; (emphasis added) and
(4) The name and mailing address of the secured party, debtor,
and transferee.
(b) [Effect of transfer statement.] A transfer statement
entitles the transferee to the transfer of record of all rights of
the debtor in the collateral specified in the statement in any
official filing, recording, registration, or certificate-of-title
system covering the collateral. If a transfer statement is presented
with the applicable fee and request form to
[[Page 67009]]
the official or office responsible for maintaining the system, the
official or office shall:
(1) Accept the transfer statement;
(2) Promptly amend its records to reflect the transfer;
(emphasis added) and
(3) If applicable, issue a new appropriate certificate of title
in the name of the transferee.
(c) [Transfer not a disposition; no relief of secured party's
duties.] A transfer of the record or legal title to collateral to a
secured party under subsection (b) or otherwise is not of itself a
disposition of collateral under this article and does not of itself
relieve the secured party of its duties under this article.
I have also considered the Official Comments of the UCC drafters
wherein they explain the intent of UCC 9-916:
Transfer of Record or Legal Title. Potential buyers of
collateral that is covered by a certificate of title (e.g., an
automobile) or is subject to a registration system (e.g., a
copyright) typically require as a condition of their purchase that
the certificate or registry reflect their ownership. In many cases,
this condition can be met only with the consent of the record owner.
If the record owner is the debtor and, as may be the case after the
default, the debtor refuses to cooperate, the secured party may have
great difficulty disposing of the collateral. (emphasis added)
Subsection (b) provides a simple mechanism for obtaining record
or legal title, for use primarily when other law does not provide
one. (emphasis added) Of course, use of this mechanism will not be
effective to clear title to the extent that subsection (b) is
preempted by federal law. Subsection (b) contemplates a transfer of
record or legal title to a third party, following a secured party's
exercise of its disposition or acceptance remedies under this Part,
as well as a transfer by a debtor to a secured party prior to the
secured party's exercise of those remedies. Under subsection (c), a
transfer of record or legal title (under subsection (b) or under
other law) to a secured party prior to the exercise of those
remedies merely puts the secured party in a position to pass legal
or record title to a transferee at foreclosure. A secured party who
has obtained record or legal title retains its duties with respect
to enforcement of its security interest, and the debtor retains its
rights as well.
3. Title-Clearing Systems Under Other Law. Applicable non-UCC
law (e.g., * * *, federal registry rules, or the like) (emphasis
added) may provide a means by which the secured party may obtain or
transfer record or legal title for the purpose of a disposition of
the property under this Article. The mechanism provided by this
section is in addition to any title-clearing provision under law
other than this Article.
After due consideration of these facts, provisions and comments, it
is my opinion that the FAA will consider utilization of a transfer
statement as contemplated by Section 9-619 of the Uniform Commercial
Code for purposes of transferring the rights of the aircraft owner, as
Lessor, to the Indenture Trustee in existing leases.
Further, your proposed transfer statement is eligible for recording
as a stand-alone document because it is a conveyance affecting an
interest in a civil aircraft of the United States in that it affects an
interest in a recorded lease between Wells Fargo Bank and Northwest
Airlines concerning operational control of aircraft.
Be advised that for purposes of transferring ownership of an
aircraft FAA will not consider a transfer statement a substitute for a
Certificate of Repossession or its equivalent under 14 CFR 47.11
Sincerely,
Joseph R. Standell
Aeronautical Center Counsel
[FR Doc. 06-9250 Filed 11-16-06; 8:45 am]
BILLING CODE 4910-13-M
