Following the announcement by Wells Fargo Trust Company, N.A. that it intends to resign from many of its aircraft owning trusts, the Aviation Working Group (AWG) is making available the Global Aircraft Trading System (GATS) transitional form draft documents for Utah common law trusts.
The GATS transitional forms will enable affected leasing companies seeking to take advantage of GATS to use the appointment of a new trustee as an opportunity to make their owner trusts ‘GATS ready’, as the GATS transitional forms are substantively the same as the standard electronic form GATS instruments, and explicitly contemplate migration of the applicable trust into GATS for efficient transition on to the GATS electronic platform, once launched.
These draft documents may be used at any time, including prior to the formal start of the transition period (expected to be on 15 July 2019). The GATS transitional forms for other jurisdictions and types of trusts will be published by AWG at the start of the transition period.
To take advantage of the GATS transitional forms, immediately following the appointment of the new trustee, it and the relevant beneficiary will need to (a) populate the schedules to the GATS Trust Instrument [Transition] (attaching as an appendix the GATS Trust Instrument Master Terms [Transition]) with the relevant information and execute the document. A GATS Security Instrument [Transition] (attaching as an appendix the GATS Security Instrument Master Terms [Transition]) has also been made available for execution by the beneficiary, the successor trustee and a secured party.
Parties entering into the GATS transitional form documents should consult their legal advisors to ensure that the new trustee holds legal title to the aircraft equipment (and all other property forming part of the trust estate) and is party to any applicable leasing agreements, security documents and other documents to which the resigning trustee was a party. In addition to adopting the GATS transitional forms, leasing companies may, at the same time, wish to make use of the GATS toolkit of model form provisions (which includes, among others things, the GATS Template Transfer Clause (Lease Agreement)). The GATS Toolkit and more information related thereto can be found in the GATS Guidance Materials.
NOTE: Leasing companies adopting the GATS transitional forms should apply for a Unique Identification Number (UIN) for each affected trust and use the GATS trust naming convention. This will ensure that there is no change to the trustâ€™s name upon the later migration onto the GATS electronic platform (see further the GATS Guidance documents), avoiding the need for any further filings which might otherwise be triggered. To apply for UIN, a leasing company or the new trustee on its behalf may complete a UIN Pre-Allocation Application Form in accordance with the instructions therein.