Adding a Partner

[Jon Kraus]

We have a 2-way partnership in 43H. We are seriously thinking about
adding one last person and in talking to them they asked about what
happens if their job took them out of town and they had to get out of
the partnership.

What is the usual procedure? Do you get an appraisal and divide it by 3
or what? I know I should have thought about this before but our
agreement between just the two of us has the one leaving the partnership
supplying a "new" partner in their place. I think I know what to do but
I am probably missing some good information that this group provides.
Thanks in advance.

Jon Kraus
'79 Mooney 201
4443H @ UMP

[[email protected]]

The way I've always done it (over 30 years, 3 co-owned airplanes, and many
different partners) is as follows: Each co-owner is free to sell his/her
"share" for whatever amount the market will bear. However (and this is a
HUGE "however") the remaining co-owner(s) each have a veto right on the
prospective new partner. Approval of a new partner is not to be
unreasonably withheld -- in other words, any veto has to come with a
reasonable justification. Also, if the new partner causes any increase in
insurance premiums then the difference is paid by the new guy.

HTH


-Elliott Drucker

[Robert M. Gary]

Jon Kraus wrote:
> We have a 2-way partnership in 43H. We are seriously thinking about
> adding one last person and in talking to them they asked about what
> happens if their job took them out of town and they had to get out of
> the partnership.
>
> What is the usual procedure? Do you get an appraisal and divide it by 3
> or what? I know I should have thought about this before but our
> agreement between just the two of us has the one leaving the partnership
> supplying a "new" partner in their place. I think I know what to do but
> I am probably missing some good information that this group provides.
> Thanks in advance.

If he leaves, its his responsibility to sell his share. What happens to
his house if he gets a job out of town, doesn't he have to sell it?
Usually you will add a last-right-of-refusal saying if you presents a
buyer that meets the requirements you have the option of matching the
buyer's money and preventing the sale (i.e. buying it yourself).

Be very, very careful of partners who think they are putting money down
in order to fly for less money. Its very important that they understand
they are *BUYING* a piece of the plane, with all the rights and
responsibilities of being an owner. Having sold partnerships myself I
can tell you that is the biggest red flag you can ever see. Do not let
this guy think he's just "putting up money" to fly the plane. He buys
it, he owns it, he has to sell it.

-Robert

[Jon Kraus]

Great advise Robert!! I'm looking at our agreement right now and will
modify it (with my other partners approval of course) to make it clear
that the leaving partner is responsible for selling his share.

Jon

Robert M. Gary wrote:
> Do not let this guy think he's just "putting up money" to fly the plane. He buys
> it, he owns it, he has to sell it.
>
> -Robert
>

[Jack Allison[_1_]]

Jon Kraus wrote:
> Great advise Robert!! I'm looking at our agreement right now and will
> modify it (with my other partners approval of course) to make it clear
> that the leaving partner is responsible for selling his share.
>
> Jon

This is how we've worded things in our agreement too. It's a good point
that Robert makes about buying a share of the plane and the
responsibility that comes along with it.


--
Jack Allison
PP-ASEL-Instrument Airplane

"To become a Jedi knight, you must master a single force. To become
a private pilot you must strive to master four of them"
- Rod Machado

(Remove the obvious from address to reply via e-mail)

[Dave Butler[_1_]]

Jon Kraus wrote:
> We have a 2-way partnership in 43H. We are seriously thinking about
> adding one last person and in talking to them they asked about what
> happens if their job took them out of town and they had to get out of
> the partnership.
>
> What is the usual procedure? Do you get an appraisal and divide it by 3
> or what? I know I should have thought about this before but our
> agreement between just the two of us has the one leaving the partnership
> supplying a "new" partner in their place. I think I know what to do but
> I am probably missing some good information that this group provides.

http://www.aopa.org/members/ftmag/article.cfm?article=931

[Jon Kraus]

Thanks Dave... This is exactly what I was looking for.... I did look on
AOPA but didn't see this.

jon

Dave Butler wrote:
> Jon Kraus wrote:
>
>> We have a 2-way partnership in 43H. We are seriously thinking about
>> adding one last person and in talking to them they asked about what
>> happens if their job took them out of town and they had to get out of
>> the partnership.
>>
>> What is the usual procedure? Do you get an appraisal and divide it by
>> 3 or what? I know I should have thought about this before but our
>> agreement between just the two of us has the one leaving the
>> partnership supplying a "new" partner in their place. I think I know
>> what to do but I am probably missing some good information that this
>> group provides.
>
>
> http://www.aopa.org/members/ftmag/article.cfm?article=931