10/23 Raptor Video

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BBerson

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The $20k “deposit holders” were $2k deposit holders who converted their refundable deposits into a $20,000 at risk equity investment. For this investment they received a guaranteed fixed price of $120,000 for a flyable Raptor, a .25% share in the Raptor llc and advanced in the queue for deliver before the refundable deposit holders. I think there were about 200.
If anyone were to buy the company they would have to build ~200 airplanes at a massive loss before they could start to sell airplanes at a market price, whatever that might be. That’s not going to happen.
What might happen is a pre-packaged bankruptcy where PM sells the assets and the money goes to all of the investor, probably for pennies on the dollar.
Thanks. Technically, they are investors. But how many actually considered it an investment instead of a discounted down payment? Do these investors get any annual reports or anything? Can they sell the shares to a new company?
 

TXFlyGuy

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If a Chapter 11, or a Chapter 7 happens, the only people who will make out are the lawyers. Sadly, this has happened more than once in the industry. The landscape is littered with the corpses of one-time aircraft manufacturers, and kit marketing companies.
 

BBerson

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It looks like the $20k was sold as a possible qualifying tax loss contribution to me.
It was both a deposit to hold a delivery spot and a share of the company. I don't see that shares were sold to true investors expecting a return with no interest in a purchase deposit. That's why I call it a non-refundable deposit instead of investment.


 

BJC

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The Raptor prototype is not owned by a corporation. Is is owned by an individual, Peter J. Muller.


BJC
 

BBerson

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The Raptor prototype is not owned by a corporation. Is is owned by an individual, Peter J. Muller.


BJC
Ok. Are you saying Raptor Aircraft LLC is owned by PM and he only sold a "membership" with a " possible" share of a profit?
See membership word here:
2) 0.25% (1/4 of 1%) membership in Raptor Aircraft LLC which entitles you to share in the potential profits further down the line. You will receive a Schedule K1 each each with your share of the profit or loss. You are not responsible for any losses but you can write them off on your taxes.
 

BBerson

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From wiki, it looks like membership is ownership:

[Although LLCs and corporations both possess some analogous features, the basic terminology commonly associated with each type of legal entity, at least within the United States, is sometimes different. When an LLC is formed, it is said to be "organized", not "incorporated" or "chartered", and its founding document is likewise known as its "articles of organization," instead of its "articles of incorporation" or its "corporate charter". Internal operations of an LLC are further governed by its "operating agreement," rather than its "bylaws." The owner of beneficial rights in an LLC is known as a "member," rather than a "shareholder.”[7] Additionally, ownership in an LLC is represented by a "membership interest" or an "LLC interest" (sometimes measured in "membership units" or just "units" and at other times simply stated only as percentages), rather than represented by "shares of stock" or just "shares" (with ownership measured by the number of shares held by each shareholder). Similarly, when issued in physical rather than electronic form, a document evidencing ownership rights in an LLC is called a "membership certificate" rather than a "stock certificate".[8]]
 

BJC

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Are you saying Raptor Aircraft LLC is owned by PM and he only sold a "membership" with a " possible" share of a profit?
No.

My comment was / is that, according to the FAA registration data, the prototype is owned by PM, not a corporation.

Raptor’s web site is just a placeholder with no information, and I don’t do facebook, so I don’t know what info PM has posted there about any incorporation.


BJC
 

ImperfectSense

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No.

My comment was / is that, according to the FAA registration data, the prototype is owned by PM, not a corporation.

Raptor’s web site is just a placeholder with no information, and I don’t do facebook, so I don’t know what info PM has posted there about any incorporation.


BJC
I don't think that FAA registration information is technically a determiner of ownership... For example, I might purchase an aircraft from someone, via a bill of sale that has been executed, and take possession of my property without having to wait for the registration information with the FAA to be updated. I grant you that typically if an LLC owns the aircraft it will be registered to that LLC, but I don't know if it's a _requirement_ that that be the case.
 

Turd Ferguson

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I don't think that FAA registration information is technically a determiner of ownership...
It is for FAA purposes.

BTW, if someone buys a plane from me, I report the sale by sending in the old registration with the information on the back filled in, which includes the buyer's name. The FAA records that the plane was sold to that person. If someone other than that person tries to register the plane, commonly called "title jumping" it can hit a snag that has to be resolved before the plane can be registered.
 

TFF

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Paperwork in process is given special dispensation. Ownership is ownership and federal and states look to it for taxes and such. That is why if yours is in a Delaware Corp or such, you want it to state that on the registry. He might want to own it and the Corporation is actually a separate entity to his advantage for some reason.
 

Jet787

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Thanks. Technically, they are investors. But how many actually considered it an investment instead of a discounted down payment? Do these investors get any annual reports or anything? Can they sell the shares to a new company?
A $20,000 loss is a $20,000 loss whatever label you put on it. I didn’t respond to Peter’s proposal as I was not willing to take any more risk than the $65 processing fee to Escrow.com so I didn’t do any additional due diligence such as asking for a copy of the LLC agreement.
I don’t know if he has produced any annual reports to the members of the LLC. Based on everything we have seen so far I doubt it.
Everything depends on the wording in the LLC agreement. Usually, but not always, there is a managing member who has all the control.
 

JohnB

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. You will receive a Schedule K1 each each with your share of the profit or loss. You are not responsible for any losses but you can write them off on your taxes.

Getting a K1 complicates your taxes a bit unless you already file a business return such as a sub S Corp or LLC but the unsuspecting taxpayer/Raptor investor HAS to declare his ownership every year or face a LARGE penalty for failure to do so. The form it goes on is also due one month earlier than the normal April15th deadline. JB
 
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