Word: braniffs
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Just before midnight Putnam and Lawyer Michael Crames went to the home of Judge John Flowers in Fort Worth. The judge had been in bed, but he got up, donned an L.L. Bean shirt and gray slacks and ushered the Braniff executives into his living room. Flowers signed three bankruptcy petitions in all-for Braniff International, Braniff Airways and Braniff Realty-and was paid $600 on the spot for his services. Said Braniff's boss later as he fought back tears, his voice cracking: "What we had to do was very difficult, and I'm sorry...
...airline's failure really surprised no one, least of all the 39 banks, life insurance companies and other institutions to which Braniff owes $733 million. The largest single creditor: Prudential Insurance, which is owed $75 million. Rumors of Braniffs demise had circulated for months. Employees had foregone half their pay for one week earlier this year, saving the airline $8 million. Even with that, Braniff had lost $336 million during the past three years and had not earned a profit since 1978. So far in 1982, it had lost $43.2 million...
Most analysts, though, had expected Braniff to last at least through the summer so that it could grab vacationing passengers with cut-rate fares. But the airline could not wait for the summer traffic. Passenger load factor, a measure of how much money a given flight is making, had dropped to 45% and less, whereas Braniffs planes needed 70% to meet cash-flow requirements. Said Senior Vice President Sam Coats: "We were way below water." Not even the $11 million that Eastern Air Lines paid three weeks ago to buy the rights to fly some of Braniff's Latin...
...Braniff took legal action under Chapter 11 of the federal bankruptcy laws. That meant that the airline's aircraft and other assets could not be seized by creditors and that time would be allowed for a reorganization plan to be set up and debt payments to be rescheduled. Braniff's planes are worth an estimated $400 million in the current depressed market for used aircraft, but of even greater value were its landing rights at a number of U.S. airports. Some of those, like the one at Chicago's O'Hare Airport, are worth $1 million...
...least theoretically, the Chapter 11 action meant that Braniff might once again fly after getting its affairs in order. Analysts, though, were highly doubtful that Braniff would ever be back in the air. Michael Derchin of First Boston, an investment banking firm, said he believed that the Chapter 11 proceeding was merely a prelude to eventual total bankruptcy...