Forbes reports that car rental company The Hertz Corporation filed for bankruptcy on Friday, May 22, 2020. Forbes indicates that Hertz’s financial condition was harmed by the substantial reduction in air travel resulting from the COVID-19 pandemic. Financial distress in the car rental industry is expected to negatively impact the already struggling automotive industry more
In an article for Mayer Brown’s COVID-19 Response Blog, Mayer Brown partners Sean Scott and Aaron Gavant and associate Kyle Tum Suden discuss recent bankruptcy court decisions concerning whether companies in bankruptcy are eligible for paycheck protection program loans under the US CARES Act.
J.C. Penney Company, Inc. is the latest retailer to file for chapter 11 bankruptcy, reports CNN. Although the COVID-19 pandemic played a role in the 118-year old retailer’s decision to file for bankruptcy protection, the company has struggled for nearly a decade to overcome slumping sales and profits. The company has reportedly obtained agreement
Brookfield Asset Management is aiming to invest approximately $5 billion in a retail revitalization investment fund to assist retailers impacted by the COVID-19 pandemic, reports the Wall Street Journal. Brookfield will reportedly focus on obtaining noncontrolling interests in retail businesses with greater than $250 million in pre-pandemic revenue. [WSJ; May 7, 2020]
The Wall Street Journal reports that clothing retailer J. Crew Group Inc. has filed for chapter 11 bankruptcy in the United State Bankruptcy Court for the Eastern District of Virginia. The company has reportedly reached a deal with lenders owed approximately $1.65 billion to conduct a debt-for-equity swap. [WSJ; May 4, 2020]
German airline Lufthansa
In an article for Mayer Brown’s COVID-19 Response Blog, Mayer Brown partners Brian Trust, Adam Paul, Tom Kiriakos, Sean Scott, Aaron Gavant, and associate Kyle Tum Suden discuss the intersection between paycheck protection program loans and DIP financing.
As courts across the country deal with scaled back operations due to the COVID-19 pandemic, bankruptcy courts in New Jersey and Delaware have issued novel orders to address the impact of the virus on certain debtors. Last month, debtors in the chapter 11 bankruptcy cases of Modell’s Sporting Goods, Inc. and CraftWorks Parent, LLC each sought and obtained court orders suspending certain case activity which, for all intents and purposes “mothballed” the cases for a certain period of time.
Continue Reading Bankruptcy Courts Address Impact of COVID-19 Coronavirus With Unique Orders
According to Bloomberg, Norwegian Air Shuttle ASA has asked its creditors to convert a portion of the approximately $4 billion they are owed into equity to allow the company to access approximately $290 million worth of loan guarantees offered by the Norwegian government. [Bloomberg; Apr. 9, 2020]
Law360 reports that recent, historic oil and
Bloomberg reports that Quorum Health Corp., which operates hospitals in 14 states, filed for chapter 11 bankruptcy on April 7, 2020, as it grapples with the financial strain of COVID-19 coronavirus. The debtors have reportedly received commitments for $100 million in DIP financing and $200 million in equity from existing noteholders. [Bloomberg; Apr. 7, 2020]
Law360 reports that Bar Louie has cancelled a previously scheduled chapter 11 auction and will, instead, be sold to its secured lenders that served as the stalking horse bidder. Bar Louie reportedly received no other qualified bids. [Law360; Mar. 27, 2020]
The recently enacted CARES Act seeks to aid consumer and small business debtors, reports