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Interlaw’s Washington D.C. Firm Wins Multimillion-Dollar Judgment in Breach of Aircraft Lease Case

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Interlaw partner firm in Washington D.C., GKG Law, has successfully represented an aircraft owner in a recent case involving the lease of a Gulfstream V (“the aircraft”). 

The GKG Law litigation team, led by Brendan Collins, filed suit alleging breach of the parties’ lease agreement based upon the lessee’s failure to timely pay rent and engine reserve payments, and failure to comply with ongoing maintenance obligations under the lease. 

After initially recovering possession of the aircraft on behalf of the owner, GKG filed for summary judgment seeking damages arising from the breach of the lease agreement, including rent and maintenance obligations for the life of the lease (continuing after the owner’s recovery of the aircraft).    

Awarding approximately $3 million to the owner, the Court held that the lease provision obligations were enforceable regardless of any defective performance on the part of the lessor, that is, rent and related obligations remained in force come “hell or high water.”   

GKG Law notes several key takeaways from the Court’s ruling: The lawsuit highlights the need for aggressive action to protect an aircraft owner’s rights under a lease agreement. It also emphasizes the importance of carefully drafted aircraft lease terms, including the need for a “hell or high water” clause, which ensures that an aircraft owner can recover its aircraft in the event of a breach and can continue to enforce rent and other payment obligations post-aircraft recovery. 

Finally, the case underlines the importance of an acceleration clause in the event of a breach, to enable the owner to immediately collect rent for the remainder of the term of the lease rather than requiring periodic collection actions for unpaid rent.