Merill Lynch

[HawkerF/O]

Assets, whether owned or leased (which would be the case with banks on the registration), are required to be listed, along with the etimated value of that asset, on the company's proxy statements by the Securities and Exchange Commision, or SEC. Failure to comply with that requirement by knowingly witholding that type of information would result in civil and criminal charges being brought forth by the SEC and shareholders. Rest assured that a busines tool such as an aircraft cannot be legally hidden from shareholders of a publically traded company. The shareholders know about the aircraft if they just read the report, which they are required to be provided a copy of.

Take Lehman Brothers as an example. If they were trying to hide from shareholders, then why would they allow the tail # to end in LB on both aircraft? I'm sure they are using their current arrangement with the bank for tax and liability purposes as you mentioned previously. The only problem with this type of arrangement (Company A leasing an airplane from Bank A for the sole purpose of transporting employees of Company B, a subsidiary of Company A) is the fine line between 91 nad 135 operations, depending on how the jurisdictional FSDO views these types of arrangements

Also, some public companies don't want shareholders knowing about their aircraft because they may be viewed as frivolous luxuries.

 

[HawkerF/O]

I was aware that most companies put their aircraft under independent companies, but why is Wells Fargo so commonly a trustee? Is that a very sophisticated version of the bank holding onto my automobile title until I pay off the loan, does Wells Fargo do aircraft management, or do they provide some other service to aircraft owners?

Like GE, another company that seems to own a lot of aircraft, Wells Fargo is the leasing company from whom the companies and airlines lease the aircraft from. Wells Fargo actually buys the aircraft new from the manufacture based on the requirements of the leasee. The company/airline then leases the aircraft from WF based upon pre-agreed terms. Unlike a car lease, the leasee is typically responsible for liquidating the aircraft once its use is no longer needed. Furthermore, the leasing company has a hold-harmless agreement with the leasee, thus removing the bank from any liability incurred by the aircraft's use should there ever be an issue brought forth by litigation.