I've been asked by someone who is looking at setting up a part ownership arrangement for advice and given his ideas were a little curly, I thought I'd ask the wider audience.
The scenario is....
Owner 1 owns an aircraft outright. The aircraft cost him $100,000, but it's worth a lot more ($200,000) because it was given to him and that's what it cost to get it flying, so ultimately it owes him $100k. If he sold it, he would be happy with his $100k.
Owner 1 wants to share the running costs of the aircraft and he wants some of his capital back to earn some interest in the bank and to buy his wife a new car. He wants to sell the other share to a friend for $50,000 because it's half of what the plane cost him.
Owner 2 buys a half share for $50,000 and is wrapped with the deal because he's getting is fantastic because the aircraft is worth around $200,000 so he's getting a fantastic deal.
In two years time, Owner 2 moves to another state for work and wants to get out of the arrangement so he decides to sell his share of the syndicate. Owner 1 doesn't have any money at the moment because his wife has just left him.
Here's the curly bit....
Should owner 2 be able to sell his share for $100,000 because the aircraft is worth $200,000, or should owners 2's share be capped at $50,000 ?
