|
Creating another entity offers some limited
protection. But lets ask a few questions.
Are you personally going to be building the
aircraft?
Are you going to be the pilot?
Are you going to be doing the
maintenance?
Are you a stockholder with voting rights in the
company ie do you have some decision authority in the company?
If you answer yes to any of the above; you
are involved in the business operations and are subject to personal
liability exposure. These are the risks we take in life. Only you can
determine the risk reward benefits for your actions.
When an attorney goes after a company or
organization, they also go after its officers as a group, each person
individually and all associated companies and persons involved in the
operations. They attempt to pierce the corporate shell(s) wherever possible.
Case in point. Enron or Adelphia Communications. You cannot forget
those examples. In summary, the attorneys always ask the question "show me
the money". They search for the money and go after it.
I heard on the news yesterday that that dry
cleaning company that was sued by a judge for, I believe it was, $61,000,000
over a pair of pants. Well, the cleaners successfully defended the suit
but he had to close down three of his dry cleaning stores because of lost
business and legal fees to defend his position. Go figure.
I know of two individuals who are members of the
Puget Sound Pilots Association. They pilot large ships through Puget Sound
in Washington State. They incorporate themselves and do not hire out as
individuals. Thus they are hired as Phillip Jones Inc. I suppose if
you incorporate yourself and fly PIC as Phillip Jones Inc.with zero assets you
have two corporate shells to pierce; you might have some protection but you will
still have to pay legal fees to defend yourself in a lawsuit. In the case
of a multimillion lawsuit you will have to pay substantial sums of money for
your attorney's fees even if you are successful in defending yourself. Can
you just imagine at $300 per hour how many hours you would pay for to defend a
$10,000,000 lawsuit? The cost could be substantial. You cannot have a successful
defense and not pay your attorneys.
My attorney told me that the only way to be
protected is to to carry insurance. Shells do not work if someone is
substantially damaged and you have a junk yard dog attorney attacking
you.
The only way you can protect yourself is as
follows:
1. you give away all your assets to your wife
before any litigous event is known;
2. you, or a shell corporation, own the plane
only;
3.you or your wife do not support the plane
operation and maintenance costs from your personal incomes. Maybe you can
do so in terms of non-voting shares in the stock of the plane.
4. You cannot have any voting rights or any
incidence of control of the plane.
I also found out that Florida and Texas offer great
protection on estate preservation in catastrophic legal situations. The
total value of your personal residence is protected from bankruptcy and
attachment in legal actions. That is why those corporate scoundrels are
building 10-15 million dollar homes in Texas and Florida.
Bob Smiley
N94RJ
|