CHICAGO— Privately owned Branson Airport LLC in Missouri --which is in default on its $113 million of municipal debt -- has filed a lawsuit against a group of airport contractors accusing them of faulty work that allegedly led to a partial foundation collapse under a runway.

The airport’s complaint targets as defendants Burns & McDonnell, McAninch Corp, Anderson Engineering Inc., and E.T. Archer Corp.

It accuses the contractors, who received $70 million for their design, engineering, and construction work associated with the runway foundation, with negligence and breach of contract.

The lawsuit was filed in Taney County Circuit Court and seeks unspecified damages. A portion of foundation under a runway collapsed in 2011 just two years after the airport in Missouri’s Ozark Mountains opened.

Those repairs and future ones are expected to further burden the struggling airport’s operating budget, which is being closely scrutinized by bondholders under a forbearance agreement.

Airport officials said in a statement that its facilities meet all current Federal Aviation Administration inspection and safety guidelines.

“It is not our practice to comment on pending litigation,” the airport’s executive director Jeff Bourk in a statement. “However, it is important to let the general public know that there is no impact on the safety of the Branson Airport.”

Burns & McDonnell issued a statement saying it was surprised by the accusations in lawsuit and intends to vigorously fight the charges as no prior claims had been made regarding its work. “We are proud of the work we did on the Branson Airport, which was a challenging project. We obviously disagree with the statements and claims in the lawsuit,” the statement read.

The trustee, UMB Bank NA, reported in a bondholder notice last month that it holds $3 million in reserves.

It did not make the most recent July 1 debt service payment of $3.4 million “given the continuing default status of the bonds” and the “company’s publicly reported ongoing financial losses” and “current forbearance and funding agreement.”

The tax-exempt, unrated bonds were sold in 2007 by the Branson Regional Airport Transportation Development District on behalf of private developers.

Proceeds funded construction of the airport to serve Branson tourism.

The airport opened in 2009 but it has fallen short of meeting initial service and passenger projections. The bonds are secured by real and personal property interests held by the company including a leasehold interest in the airport.

A majority of investors agreed in April to give the struggling airport another year to bolster operations.

Branson Airport LLC previously defaulted on terms of a forbearance agreement and faced possible bondholder enforcement action without a new agreement. The revised agreement extends a June 30, 2013 expiration to June 30, 2014.

The revised agreement lays the groundwork for negotiations on amendments to the original bond documents. It “contemplates that negotiations with the company may result in company proposals to amend the bonds and bond documents,” a trustee notice read.

Under terms of the new agreement, the company agreed to amended passenger and budget projections through the end of the year and will provide monthly financial reports during the forbearance term. The document outlines events that could trigger its termination including the airport’s failure to hit certain operational benchmarks.

Bondholders have showed patience in giving the airport time to succeed as its prospects have brightened with new service added by Southwest Airlines, which took over existing service provided by AirTran Airways after acquiring AirTran. 

The airport defaulted on bond terms in 2011 but won a reprieve from any bondholder enforcement actions in its first forbearance.

The airport currently boasts service from Southwest and Frontier Airlines, to five nonstop destinations: Denver, Dallas, Orlando, Chicago and Houston.

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