A security interest in an aircraft engine can be perfected only in the manner required by federal law. Federal law excludes by preemption the recording of title to or liens against aircraft, so that a transfer that is not recorded under the federal system is not effective. Security Interests in Engines less than 550 horsepower are not eligible for recording. A security interest in an aircraft is perfected by filing with the Aircraft Registration Branch of the Federal Aviation Administration.
A security agreement granting security interest in an aircraft engine in Arkansas is a legal document that establishes the rights and obligations of a borrower and lender in relation to the financing of an aircraft engine. The agreement allows the lender to hold a security interest in the engine, which serves as collateral for the loan. If the borrower defaults on the loan, the lender can take possession of the engine to recover the outstanding debt. Arkansas has specific laws and regulations governing security agreements and the granting of security interests in aircraft engines. These laws ensure that lenders have a legal framework to protect their interests and borrowers have a clear understanding of their obligations. There are different types of security agreements granting security interest in aircraft engines in Arkansas, including: 1. Fixed Security Interest: In this type of security agreement, the lender holds a fixed or specific security interest in a particular aircraft engine. This means that the engine itself serves as collateral for the loan, and the lender has the right to possess and sell the engine in case of default. 2. Floating Security Interest: A floating security interest grants the lender a security interest in a group or class of aircraft engines rather than a specific engine. The borrower may own multiple engines, and the lender's interest "floats" over these engines. The lender has the right to repossess any engine within the class if the borrower defaults on the loan. 3. Third-Party Security Interest: In some cases, a third party may hold a security interest in an aircraft engine on behalf of the lender. This third party, often a professional trustee, acts as an intermediary and safeguards the lender's interests. This arrangement provides an additional layer of protection for both parties involved. In Arkansas, the security agreement must comply with the requirements of the Uniform Commercial Code (UCC), specifically Article 9. The UCC governs how security interests are created, perfected, and enforced. It outlines the necessary steps for filing a financing statement with the Arkansas Secretary of State's office to perfect the security interest. To ensure compliance and enforceability, it is crucial for borrowers and lenders to consult legal professionals familiar with the intricacies of Arkansas law when drafting and executing a security agreement granting security interest in an aircraft engine.
