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]

 

British communications and satellite internet company OneWeb, which filed for bankruptcy earlier this year in the United States Bankruptcy Court for the Southern District of New York, has received a $1 billion bid to purchase the company out of bankruptcy, reports CNBC. If the sale is approved, the U.K government and Bharti Global, which are reportedly contributing $500 million each, would become the company’s new owners. OneWeb is expected to challenge SpaceX’s starlink network in providing broadband internet service to consumers from satellites as opposed to traditional cable and fiber connections. [CNBC; July 10, 2020]

The Large Corporations Committee of the Bankruptcy & COVID-19 Working Group, a group of university professors studying the intersection of the COVID-19 pandemic and various areas of bankruptcy law, sent a letter to members of the United States Congress expressing the working group’s opinions that: (1) there is no current need for a federal lending facility targeted towards providing DIP loans to large corporations; (2) federal lending should be available to chapter 11 debtors on the same conditions as any other firm; and (3) federal lending support may be warranted for smaller businesses seeking to reorganize in chapter 11. [Large Corporations Committee of the Bankruptcy & COVID-19 Working Group; July 10, 2020]

Reporting from Bloomberg shows  that since March of 2020, the COVID-19 pandemic has been a precipitating factor in at least 112 commercial bankruptcy filings by both large, multinational companies and smaller, regionally focused companies. [Bloomberg; June 9, 2020]

The Wall Street Journal reports that just two days after its June 8, 2020 bankruptcy filing, Brooks Brothers Group Inc. has purportedly been contacted by two potential bidders, apparel company Sparc Group LLC and mall owner Simon Property Group Inc., for the company’s assets. WHP Global Inc, the company’s DIP lender, is also reportedly preparing an offer to purchase the company out of bankruptcy. [WSJ; July 9, 2020]

In Nicolaus v. United States, the Eighth Circuit Court of Appeals overturned decisions by the bankruptcy court and district court by finding that debtor Anthony Nicolaus properly served the IRS with an objection to its claim by sending the objection to the IRS’s general notice address instead of to the local United States Attorney. The Eight Circuit further ruled that objections to claims need not be served in accordance with Federal Rule of Bankruptcy Procedure 9014, which applies to motions and requires that certain motions in contested matters must be served on the United States Attorney in the district where the action is pending. [8th Cir.; July 6, 2020]

Various creditor constituencies in the Purdue Pharma bankruptcy case have requested access to financial information concerning foreign affiliates controlled by the Sackler family, reports the Wall Street Journal. The creditors contend that this information is critical in determining the creditors’ response to the current multi-billion dollar settlement offer being made by the Sackler family in connection with Purdue Pharma’s bankruptcy case. [WSJ; July 2, 2020]

NPC International, a nationwide franchisee of fast food restaurants Pizza Hut and Wendy’s, filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Texas, reports CNN. NPC also recently entered into a restructuring support agreement with various first lien debt holders, which is intended to reduce long-term debt and help the company improve its capital structure. [CNN; July 1, 2020]

PG&E Corporation announced its exit from chapter 11 bankruptcy on July 1, 2020 after its plan of reorganization was confirmed on June 20, 2020. Under the confirmed plan, PG&E made payments totaling $5.4 billion to wildfire victims on the plan’s effective date (i.e. July 1, 2020), with an additional $1.35 billion in payments to be made in two installments between 2021 and 2022. [PG&E; July 1, 2020]

Reporting from Market Watch indicates that Tailored Brands Inc., a retail clothing business that counts Men’s Wearhouse, Jos A. Bank, and Joseph Abboud among its brands, failed to make a $6.1 million interest payment on its 2022 senior notes that was due on July 1, 2020. As a result of the missed payment, Tailored Brands entered a 30-day grace period in which it may make its missed interest payment after which, the missed payment becomes an event of default under the 2022 senior notes. [Market Watch; July 1, 2020]

 

 

 

Mayer Brown Partners Matthew O’Meara and Sean Scott discussed the impact of the recent news that a New York state court judge denied a preliminary injunction request filed in the Supreme Court of New York by a group of dissenting first-lien lenders, seeking to prevent a borrower, Serta Simmons, and certain first-lien consenting lenders from entering into a recapitalization transaction in an article available here.