What We’re Reading This Week [September 14, 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]
