P.M. BRIEFING : Braniff Likely to Default
Braniff Inc. acknowledged today in a filing with the Securities and Exchange Commission that the company will probably default on payments to unsecured creditors and not make distributions to stockholders.
Braniff Inc., the Orlando, Fla.-based parent company for Braniff Airlines, filed for Chapter 11 bankruptcy protection last fall and began liquidating assets to cover its $300 million in debts.
But with the sale of its last major asset--the rights to buy 74 Airbus Industrie A-320 planes--Braniff is conceding that most of its creditors will not be paid and that its shareholders will not receive distributions.
It is also likely that $100 million of Braniff junk bonds, whose holders include Drexel Burnham Lambert Inc., Connecticut National Bank of Hartford, and Citizens & Southern National Bank in Atlanta, will not be repaid.