"TaxSrv" wrote in message
...
"Dude" wrote:
Also, the intellectual property is often held in an offshore
corporation, though that is changing due to tax law reasons.


Where did you read that as applicable to kitplanes?

I didn't, I was not limiting my remarks to kit planes, sorry for the
confusion. Most of my experience in this area is mostly NOT aviation
related.


Whether or not
that poses a problem come judgment time if the defendant loses, the
real issue is what that asset is worth. If a kitplane mfr loses
because the design is found to be dangerous, how much might a
plaintiff's attorney think the value of the design has just been
whacked?

Excellent point.

I doubt in most cases that the value of the design is all
that much, because unit sales volume is too low to place much of a
"capitalized value" on it. It's also reasonable for the attorney to
conclude the liquidation value is too unpredictable in this fickle
market. How often has the poor-selling Pulsar changed hands? Bottom
line, these companies generally are just not "deep pockets," with
numerous examples of empty ones.

Fred F.

I would agree with you except that there are companies that succeed or at
least entertain and pay the owners enough to keep them going. Some fight is
usually put up to keep the company intact. I look at layering as insurance
against attacks. If one were going to sue a manufacturer for a grievance,
and the attourney said that it was fruitless but that you could likely put
them out of business for some amount of money, then you might see a case get
filed just over emotion or principal.

Layering raises the amount of money needed, and will scare off even rightful
claims.