JetAway, a limited liability company, along with another LLC, One Creative Place, executed a deed of trust that identified its lenders as Paul and Michael Girdner of Boise, Idaho.
Michael Girdner also signed as the borrower, on behalf of both LLCs, which is not unheard of, a local escrow agent told the Daily Press. The notarized document certifies that Girdner is a “manager or managing member of JetAway Aviation, LLC,” and he would therefore have the power to act on behalf of the company.
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JetAway, located at 1 Creative Place adjacent to the Montrose Regional Airport, is locked in a heated and expensive legal battle over Montrose County’s decision to award a competitive bid for fixed-base operations at the airport to another company. The county and JetAway will head to court in May after Federal Aviation Administration-sponsored mediation terminated.
The successful FBO bidder, Black Canyon Jet Center, also succeeded in having JetAway held in contempt over the advertising of fuel sales, which court orders barred JetAway from doing.
Paul Girdner testified at the November contempt hearing that he pays the company’s bills. Testimony indicated he was a financial backer.
The Daily Press showed the deed of trust to its attorney, who explained how such deeds operate.
David Masters said a deed of trust, similar to a mortgage, uses property as collateral to secure financing. In a deed of trust, the borrower transfers the property to the public trustee to be held in trust, subject to the terms of the deed.
The Dec. 20 deed places its property in trust with Montrose County Treasurer Rosemary Murphy, who can be called upon to sell it if terms are not met and a demand for sale is made.
According to the document, the deed was inked to secure to the lender (the Girdners) “the repayment of the capital contributed by lender to borrowers (JetAway and One Creative Place) in accordance with the operating agreements of borrowers as agreed upon by the members of borrowers; however, if not sooner paid, then upon the earlier of the sale or refinancing of the property, or Dec. 31, 2010.”
Masters said the JetAway deed was “a bit unusual,” because it calls for repayment of capital contributed by the two Girdners. A deed of trust secures a loan, but a loan is not the same thing as a capital contribution, he said.
“If you contribute capital, you’re an owner. If you make a loan, you’re a lender. I don’t see how you can be the same thing at the same time.”
An LLC is run by either its member-owners, or the managers they hire to run it, and the members function basically as shareholders. While an LLC’s articles of organization are public, operating agreements concern the internal rules governing the LLC are not.
Masters said the document indicates the Girdners have loaned to the entities — JetAway and One Creative Place — not to the members.
The copy of the deed of trust obtained by the Daily Press does not show a legal description of the property being pledged.
An escrow agent, who did not wish to be identified, said a legal description is necessary for purposes of recording, but that the limited liability companies could still prove they were attempting to describe the property by listing its physical address.
According to the deed from Scaled Manufacturing to One Creative Place, the property with the physical address of 1 Creative Place was Lot 1 of Aerospace Research Park, which was further subdivided into three lots as the JetAway Minor Subdivision. The real estate records do not indicate that JetAway Aviation owns any real property in Montrose County.
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