This paper introduces an integrated approach for flexible-aircraft time-domain aeroelastic simulation and controller design suitable for wake encounter situations. The dynamic response of the vehicle, which may be subject to large wing deformations in trimmed flight, is described by a geometrically nonlinear finite-element model. The aerodynamics are modeled using the unsteady vortex lattice method and include the arbitrary time-domain downwash distributions of a wake encounter. A consistent linearization in the structural degrees of freedom enables the use of balancing methods to reduce the problem size while retaining the nonlinear terms in the rigid-body equations. Numerical studies on a high-altitude, long-endurance aircraft demonstrate the reduced-order modeling approach for load calculations in wake vortex encounters over a large parameter space. Closed-loop results finally explore the potential of combining feedforward/feedback control and distributed control surfaces to obtain significant load reductions.