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]

 

The Wall Street Journal reports that Dutch retail chain HEMA B.V. sought protection under chapter 15 of the United States Bankruptcy Code on August 19, 2020 in the United States Bankruptcy Court for the Southern District of New York while it seeks to complete a restructuring of approximately US$474 million of debt in the United Kingdom. [WSJ; Aug. 20, 2020]

Reporting from CNBC, which is based on data from the U.S. Department of Labor, shows that unemployment claims for the week ending August 15, 2020 exceeded 1.1 million, which is almost 200,000 more than economists expected. [CNBC; Aug. 20, 2020]

Tennessee headquartered mall owner CBL Properties is expected to seek bankruptcy protection to restructure approximately $3 billion in debt, reports Yahoo Finance. Since the beginning of the COVID-19 pandemic, CBL and other commercial landlords have dealt with decreased revenue from rent as tenants have dealt with decreased foot traffic. [Yahoo Finance; Aug. 19, 2020]

Data from Fitch shows that in the first half of 2020 $ 40.1 billion worth of commercial mortgage backed securities were transferred to special servicing, with $35.5 billion worth being transferred during the second quarter of 2020. [Fitch; Aug. 17, 2020]

The Wall Street Journal reports that Aeromexico, Mexico’s flagship airline which filed for bankruptcy in the US earlier this year, has obtained commitments for up to a $1 billion in debtor-in-possession financing facility from Apollo Global Management Inc. The financing consists of two tranches, with one tranche holding a debt-to-equity conversion option. [WSJ; Aug. 14, 2020]

Reporting from Yahoo Finance indicates that Australian telecommunications company Speedcast International Limited has received a $395 million equity commitment from Centerbridge Partners, L.P. and its affiliates as well as up to $220 million in new debtor-in-possession financing. Centerbridge, which is one of Speedcast’s largest lenders, committed to provide Speedcast’s existing secured lenders with the opportunity to participate in the equity commitment on a pro-rata basis. [Yahoo Finance; Aug. 12, 2020]

The Chicago Tribune reports on the substantial number of small, local businesses that are ceasing operations due to the economic impact of the COVID-19 pandemic. The reporting suggests that the closure of these businesses, many of which will not ultimately file for bankruptcy, should be considered in conjunction with bankruptcy filing statistics in order to understand the full economic impact of the COVID-19 pandemic. [Chicago Tribune; Aug. 12, 2020]

Stein Mart Inc., a Jacksonville, FL based off-price retailer, filed for chapter 11 bankruptcy protection on August 12, 2020 in the United States Bankruptcy Court for the Middle District of Florida, reports Reuters. The Company plans to close many, if not all, of its retail locations in connection with its bankruptcy filing. [Reuters; Aug. 12, 2020]

Bloomberg reports on the growing use of chapter 11 bankruptcy by large retail tenants in order to negotiate their way out of costly, long-term leases and the potential downstream effects of this process on both the commercial real estate and commercial mortgage backed securities markets. [Bloomberg; Aug. 6, 2020]

The Wall Street Journal reports that in spite of substantial levels of financial aid from federal governments, there were 580 chapter 12 bankruptcy filings by family farmers between June 2019 and June 2020, which is an increase of 8% year-over-year. [WSJ; Aug. 6, 2020]

In Artesanias Hacienda Real S.A. De C.V. v. North Mill Capital, LLC, the Third Circuit Court of Appeals held that creditor Artesanias Hacienda Real SA de CV retained constitutional standing and statutory authority to pursue fraudulent transfer claims against the debtor/defendant, North Mill Capital, LLC, even though its chapter 7 bankruptcy trustee elected not to pursue such claims. [3rd Cir.; Aug. 4, 2020].

Reporting from Forbes discusses the potential impact of widespread bankruptcies by large, well-known companies on consumers, concluding that the substantial number of bankruptcy filings by such companies may ultimately lead to marketplace consolidation and reduced consumer choice. [Forbes; Aug. 4, 2020]

Retail Ecommerce Ventures (“REV”), an investment firm that seeks to convert struggling brick-and-mortar brands into successful e-commerce brands, has purchased the intellectual property and e-commerce assets of Pier 1 Imports for $31 million, reports Forbes.  REV also recently purchased the intellectual property and e-commerce assets of Dressbarn, which has seen growth in revenue since REV relaunched its e-commerce business. [Forbes; July 31, 2020]

The Wall Street Journal reports that Fannie Mae and Freddie Mac saw improved earnings in the second quarter of 2020 as fewer borrowers sought to place their loans into forbearance. [July 30, 2020]

Judge Christopher Sontchi of the United States Bankruptcy Court for the District of Delaware allowed bankrupt clothing retailer Brooks Brothers Group Inc. to defer August and September rent payments, reports Bloomberg. Although certain landlords argued that allowing such a rent deferral was unwarranted in light of Brooks Brothers decision not to reopen certain retail locations after state and local restrictions that forced the locations to close were lifted, Brooks Brothers successfully argued that being required to make rent payments would jeopardize their restructuring  because it would increase the risk that the debtors could run out of money before  consummating a sale. [July 30, 2020]

Reuters reports that Tonopah Solar Energy LLC  has filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware. Tonopah has reportedly reached an agreement to settle the $425 million it owes to the U.S. Department of Energy for approximately $200 million. [Reuters; July 30, 2020]

Mayer Brown partner Adam Paul was quoted in a Bloomberg article about the increased demand for restructuring attorneys in light of the economic effects of the COVID-19 pandemic. [Bloomberg; July 29, 2020]

Senators Sheldon Whitehouse and Sherrod Brown recently introduced the Medical Bankruptcy Fairness Act, which would allow consumer debtors to discharge student loans based on either economic loss caused by the COVID-19 pandemic or substantial medical debt within the three years before filing for bankruptcy, reports Forbes. [Forbes; July 24, 2020]

Bloomberg reports that creditors of Ebony Media Holdings LLC have placed the company into involuntary bankruptcy in an effort to take over the company. [Bloomberg; July 23, 2020]

Ascena Retail Group, the parent company of Ann Taylor and Lane Bryant, filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Eastern District of Virginia on July 23, 2020, according to Reuters. Ascena will reportedly seek to reduce its debt by approximately $1 billion. [Reuters; July 23, 2020]

CNBC reports that shopping mall owners are increasingly seeking to purchase distressed retail companies out of bankruptcy, particularly those that may be significant tenants. [CNBC July 22, 2020]

Reporting from Reuters discusses how large firms that have filed for bankruptcy relief since the beginning of the COVID-19 pandemic have awarded bonuses to executives shortly before filing for bankruptcy. Of the 40 large firms investigated, Reuters found that approximately one-third awarded bonuses to executives within the month before filing for bankruptcy. [Reuters; July 17, 2020]

Bloomberg reports that California Resources Corp., a prominent drilling company that filed for bankruptcy in the United States Bankruptcy Court for the Southern District of Texas on July 15, 2020, will seek to confirm a debt-for-equity swap with existing secured lenders and junior creditors, who will receive 93% and 7% of the reorganized company, respectively. [Bloomberg; July 15, 2020]

Retailer J.C. Penney Co. has received an extension from its secured lenders of the time in which it is required to provide such lenders with a confidential business for their approval as it required under the J.C. Penney’s current DIP financing arrangement, reports CNBC. J.C. Penney reportedly plans to cut 1,000 jobs in connection with its restructuring. [CNBC; July 15, 2020]

The Wall Street Journal reports that bankruptcy filings under the recently enacted Small Business Reorganization Act (“SBRA”) are likely to increase as federal stimulus programs come to an end and that such filings will test the underlying viability of the law as a tool to assist small commercial debtors reorganize under the bankruptcy code in an efficient manner. The report focuses on Twisted Burger, a Texas-based chain restaurant, which filed for chapter 11 bankruptcy protection under the SBRA in order to obtain rent relief and other concessions from creditors in light of the COVID-19 pandemic. [WSJ; July 11, 2020]