The Wall Street Journal reports that U.S. consumer retail spending rose 1.9% in September 2020. September is the fifth straight month of retail sales growth according to the United States Department of Commerce. [WSJ; Oct. 16, 2020]

The U.S. Supreme Court heard oral arguments in City of Chicago, Illinois v. Robbin L. Fulton, et al. on Tuesday, October 13, 2020, reports CBS. The case implicates the intersection between the bankruptcy code’s automatic stay and turnover provisions and whether consumer debtors whose cars were impounded for unpaid tickets before bankruptcy may have their cars returned from impound after filing for bankruptcy.  [Oct. 14, 2020]

Bloomberg reports that a surge in COVID-19 cases during the fall and winter could push a significant number of hospitals into bankruptcy.  Since the COVID-19 pandemic began, more than three dozen hospitals have filed bankruptcy. Bloomberg further reports that nearly half of all domestic hospitals could be operating at a loss by the year’s end. [Bloomberg; Oct. 14, 2020]

CNN reports that AMC Entertainment Holdings, Inc., the world’s largest movie theater chain, may exhaust its existing cash reserves by the end of 2020 or early in 2021 if it is not able to raise additional capital in the near-term. AMC has reopened 83 percent of its theaters nationwide, but reports that attendance is down about 85 percent from 2019.   [CNN; Oct. 13, 2020]

Can state regulatory agencies move ahead with lawsuits against businesses who file for bankruptcy in order to enforce consumer protection and business laws, or does the automatic stay’s broad injunctive sweep capture those actions? The answer depends on whether the state is acting in its regulatory capacity or simply like another creditor – and the distinction is not always clear. Continue Reading Regulator or Creditor: When is Enforcement of Consumer Protection Laws Exempt from the Automatic Stay, and Who Makes That Determination?

CNN reports that fast-casual dining chain Ruby Tuesday, Inc. filed for chapter 11 bankruptcy relief in the United States Bankruptcy Court for the District of Delaware on October 7, 2020. Ruby Tuesday reportedly plans to close approximately 45% of its locations as part of its restructuring efforts. [CNN; Oct. 7, 2020]

Bloomberg reports that the Netherlands recently approved a new corporate debt restructuring law on Tuesday October 6, 2020.  The new law features elements of both U.S. Chapter 11 procedures and U.K. schemes of arrangement and aims to boost the appeal of the Netherlands as a jurisdiction to restructure corporate debt. [Bloomberg; Oct. 7, 2020]

Reporting from the Wall Street Journal indicates that commercial real estate experts anticipate an uptick in commercial mortgage foreclosures as a result of the continuing economic effects of the COVID-19 pandemic. One source noted that  he “expects foreclosures in commercial real estate caused by the pandemic to be far worse than what happened during and after the 2007-2009 recession, when properties backing tens of billions of dollars in commercial mortgages ended up in foreclosure.” [WSJ; Oct. 6, 2020]

U.S. commercial bankruptcy filings are up 33% in 2020 as of the end of September 2020, reports Reuters. New commercial bankruptcy filings in September 2020 were up 78% over new commercial bankruptcy filings in September 2019. [Reuters; Oct. 5, 2020]

Since filing for Chapter 11 in May 2020, Hertz and its major stakeholders have been in negotiations and, at times, disputes over how best to reduce Hertz’s nearly half-a-million vehicle fleet.  These negotiations and disputes have caught the eye of investors in asset-backed securities (“ABS”) and market watchers alike, as the outcome of the case could have rippling effects across the ABS industry and capital markets, generally.

Continue Reading E Pluribus Unum or Ex Uno Plures? Attempted ABS Master Lease Rejection in the Hertz Bankruptcy

Research from the Brookings Institute finds that the COVID-19 pandemic’s impact on firm profits and revenues thus far is comparable to the worst quarter of the 2008-2009 financial crisis. The researchers further project that bankruptcy filings will increase by as much as 140 percent this year compared with last year. [Brookings; Sept. 23, 2020]

Bloomberg reports that Malaysia Airlines Bhd. has been in contact with lessors, creditors, and key suppliers in order to effectuate an urgent financial restructuring as the company approaches a potential liquidity crisis in November of 2020. [Bloomberg; Oct. 2, 2020]

Reporting from the Wall Street Journal indicates that satellite communications company Ligado Networks LLC is seeking approximately $4 billion in additional debt financing in order to avoid a chapter 11 bankruptcy filing. Ligado currently has approximately $2 billion in loans coming due in December of 2020. [WSJ; Oct. 1, 2020]

Reuters reports that Lonestar Resources US Inc. filed for chapter 11 bankruptcy relief in the United States Bankruptcy Court for the Southern District of Texas on Wednesday, September 29, 2020. Lonestar will reportedly seek to eliminate approximately $390 million as part of its plan of reorganization. [Reuters; Oct. 1, 2020]

Reuters reports that retailer Neiman Marcus Holding Co. emerged from chapter 11 bankruptcy on September 25, 2020. The Company’s confirmed plan of reorganization eliminated more than $4 billion of debt and $200 million of annual interest expense. [Reuters; Sept. 25, 2020]

In an opinion piece for Bloomberg, columnist Justin Fox reports on the uptick in new business applications in 2020 despite the economic downturn caused by the COVID-19 pandemic. Fox suggests that economic stimulus efforts undertaken at the beginning of the pandemic, primarily the CARES Act, have contributed to this increase in business applications. [Bloomberg; Sept. 24, 2020]

Reporting from Yahoo Finance indicates that Colombian Airline Avianca Holdings is facing criticism in its home country of Colombia as a result of over US$6 million worth of bonuses paid to top executives in May 2020, days before the airline filed for bankruptcy and shortly after the company furloughed the majority of its employees. [Yahoo Finance; Sept. 23, 2020]

CNN Business reports that Sizzler USA filed for chapter 11 bankruptcy relief in the United States Bankruptcy Court for the Southern District of Texas. The filing is for Sizzler’s 14 company-owned domestic restaurants and does not include its international or franchised locations. [CNN; Sept. 22, 2020]

The Wall Street Journal reports that on September 17, 2020, GNC Holdings, Inc. obtained authorization from the United States Bankruptcy Court for the District of Delaware to sell substantially all of its assets to one of its largest shareholders, China-based Harbin Pharmaceutical Group Co., for approximately $760 million in spite of national security concerns raised by Senator Marco Rubio (R-FL). [WSJ; Sept. 17, 2020]

An article from Finance and Commerce describes the lobbying efforts currently underway by investors in the hospitality industry, particularly those with investments in hotels, to obtain federal stimulus funds for their struggling investments. [Finance & Commerce; Sept. 15, 2020]

Reporting from Bloomberg suggests that the next significant wave of bankruptcy filings resulting from the economic fallout caused by the COVID-19 pandemic may not occur until 2021. Although a significant number of companies across industries have experienced distress since the COVID-19 pandemic commenced, many have been able to obtain federal stimulus funds or otherwise reach forbearance arrangements with lenders and avoid bankruptcy in the near-term. [Bloomberg; Sept. 15, 2020]

Senator Tom Tillis (R-NC) recently introduced Senate Bill 4479, which would modify sections 365 and 547 of the bankruptcy code by, among other things, increasing from 210 days to 300 days the amount of time a debtor has to assume, assume and assign, or reject its non-residential real property leases and protecting certain payments of rental and supplier arrearages from clawback as preferential transfers. [U.S. Senate; Aug. 6, 2020]

Judge James Garrity of the United States Bankruptcy Court for the Southern District of New York rejected LatAm Airlines’ approximately $2.4 billion DIP financing arrangement, citing, among other things, concerns over terms of the financing arrangement that would allow certain DIP lenders to swap their debt for shares in the reorganized company at an approximately 22% discount, reports Reuters. [Reuters; Sept. 11, 2020]

The Wall Street Journal reports that certain large U.S.-based manufacturers are seeking to shield themselves from the economic effects of the COVID-19 pandemic by increasing the speed with which they process and pay invoices from smaller vendors and other entities in their supply chains. The reporting suggests that these manufacturers’ decision may be based on examples in the market where other large manufacturers’ decision to increase payment terms appeared to have played a role in a critical supplier’s decision to file for bankruptcy. [WSJ; Sept. 10, 2020]

Bloomberg reports that Century 21 Stores, a New York-based discount retailer, has filed for chapter 11 bankruptcy and plans to close all thirteen of its retail locations. Substantial decreases in foot traffic caused by the COVID-19 pandemic and disputes with insurers over approximately $175 million in business interruption claims are reportedly the primary reasons for the bankruptcy filing. [Bloomberg; Sept. 10. 2020]

Reporting from CNN indicates that U.S. oil prices are undergoing significant decreases for the first time in approximately three months based primarily on concerns that demand for oil will significantly decrease as summer driving ceases and demand for air travel remains poor. [CNN; Sept. 8, 2020]

Bloomberg reports that Neiman Marcus Group Inc.’s plan of reorganization was confirmed on September 4, 2020 by the United States Bankruptcy Court for the Southern District of Texas. The confirmed plan revolves around a debt-for-equity swap, which will eliminate approximately $4 billion of the company’s $5.5 billion pre-petition secured debt. [Bloomberg; Sept. 4, 2020]

AMC Entertainment Holdings Inc. commenced efforts to raise approximately $180 million in equity capital on September 2, 2020, reports the Wall Street Journal. The reporting indicates that the equity capital raise is intended to help the company avoid filing for chapter 11 bankruptcy. [WSJ; Sept. 4, 2020]

Reuters reports that the United States District Court for the Southern District of New York has recognized Virgin Atlantic’s chapter 15 bankruptcy petition. The September 3, 2020 recognition order gives effect to Virgin Atlantic’s restructuring plan, which was recently sanctioned by the English High Court in London. [Reuters; Sept. 3, 2020]

Reporting from Yahoo Finance indicates that Whiting Petroleum Corporation exited bankruptcy on September 1, 2020. Whiting, which filed for bankruptcy in early April 2020, completed a debt-for-equity swap, refinanced its existing revolving credit facility, and will pay existing secured claims through its confirmed plan of reorganization. [Yahoo; Sept. 2, 2020]

Houston, TX-based oil services provider SAExploration Holdings Inc. has filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas, reports the Wall Street Journal. SAExploration reportedly owes $6.8 million on a unsecured loan it received through the Paycheck Protection Program of the CARES Act. [WSJ; Aug. 28, 2020]

The Wall Street Journal reports that the economic effects of the COVID-19 pandemic have thus far had a more modest adverse impact on the $700 billion collateralized loan obligation market, which some experts believed would be subject to a wave of downgrades by the three major credit rating agencies. Experts are now hopeful that collateralized loan obligations will avoid the steep downgrades and forced selling that was seen during the 2008 subprime mortgage-backed securities crisis. [Aug. 28, 2020]

Bloomberg reports that bankrupt retailer Neiman Marcus Group Inc. has filed an adversary proceeding against one of its unsecured creditors, Marble Ridge Capital LP, alleging that Marble Ridge attempted to manipulate bidding at an auction for Neiman’s e-commerce assets. Neiman is seeking approximately $55 million in damages as well as a preliminary injunction to prevent Marble Ridge from winding down its operations and distributing its assets. [Bloomberg; Aug. 27, 2020]

In an appeal arising out of the Tribune Company bankruptcy case, the United States Court of Appeal for the Third Circuit affirmed the decisions of two lower courts to confirm the debtors’ plan of reorganization notwithstanding objections from senior note holders that the debtors’ plan discriminated against them by failing to account for subordination agreements that entitled the senior note holders to greater recovery than they received under the plan. The Third Circuit ultimately determined that the debtors’ plan did not unfairly discriminate because the difference in treatment for the senior note holders amounted to less than 1% of their total recovery under the debtors’ plan. [3rd Cir.; Aug. 26, 2020]

Reuters reports that J. Crew Group Inc. expects to emerge from chapter 11 bankruptcy in early September after its plan of reorganization was confirmed by the United States Bankruptcy Court for the Eastern District of Virginia on August 25, 2020. [Reuters; Aug. 25, 2020]