In re Ayers Aviation Holdings, Inc. (00-11881, Adv. No. 01-01003)

The case was remanded to this Court from the District Court for the Middle District of Georgia, The Honorable W. Louis Sands, Chief Judge, for the sole purpose of determining the following two issues:  (1) Whether Ayres Aviation Holdings, Inc. (“Debtor”) properly raised the legal issue of whether it was a “buyer in ordinary course of business”; and (2) Whether Ayres Aviation Holdings, Inc. was in fact a “buyer in ordinary course of business” of General Electric engine 998.

The Court first held that Debtor properly raised the issue of whether Ayres Aviation Holdings, Inc. was a “buyer in ordinary course of business. The Court relied on the admission of General Electric that Debtor had properly raised the issue and upon the record of the hearing to reach its conclusion.

The Court next held that Debtor was not a “buyer in ordinary course of business,” as defined in O.C.G.A. § 11-1-201(9), of General Electric engine 998 so as to extinguish the ownership rights of General Electric in the engine. The Court looked to the last sentence of the O.C.G.A. § 11/1/201(9) definition and to the interpretation of that Section by the Eleventh Circuit Court of Appeals in Sterling National Bank & Trust Co. of New York v. Southwire Co., 713 F.2d 684 (11th Cir. 1983). These authorities were considered with the testimony of former principal of Debtor, Fred P. Ayres, that Debtor took the L610 aircraft and its two General Electric engines (including engine 998) in exchange for the forgiveness of a money debt arising from the transfer of avionics from Debtor to LET, a.s.

Monday, March 13, 2006