The 3M's: Management Companies and Lawsuit Landmines

Numerous management firms face pending litigation due to the deadly trifecta of misrepresentation, maintenance mishaps, and poor management execution.

Issues abound in aircraft maintenance, extending beyond Boeing. Many management companies overcharge, mishandle funds, neglect maintenance, or inadequately care for aircraft, risking costly mishaps, revenue loss, FAA scrutiny, or serious malfunctions.

Aircraft maintenance is vital and expensive. While management firms can help, owners remain ultimately responsible under FAR 91.403(a), necessitating vigilant oversight. Many owners discover mismanagement, from unnecessary repairs to neglect, leading to groundings or emergencies.

Misrepresentation is another litigation trigger. Management firms often exaggerate charter numbers or revenue potential, luring owners into costly contracts. Owners must scrutinize market data to avoid overcharges and fund mismanagement.

Management execution can also spark lawsuits, with firms cutting corners or outsourcing to ill-equipped contractors, risking shoddy work and safety hazards. Some firms charge high rates, then farm out repairs, compounding errors.

Takeaways: scrutinize maintenance invoices, ensuring accuracy and necessity. Safety and financial security hinge on thorough oversight. For owners, resist blind approval; for management firms, diligence is key to avoiding costly errors.

The foregoing is for informational purposes and show not be construed as legal guidance or counsel regarding any specific matter or concern. 

Erica K. Ramos

Aviation Legal Counsel

Erica@aviationlegalcounsel.com