What We’re Reading This Week [April 12, 2021]
A recent New York Times article highlights the challenges oftentimes faced by smaller vendors in large bankruptcy cases. The article profiles a couple, who owns a warehouse leased to Brooks Brothers, who were left holding a $240,000 cleanup fee bill when Brooks Brothers rejected their warehouse lease and refused to clear the equipment and other materials being stored. [The New York Times; April 2, 2021]
Bloomberg reports on Alpha Media’s lawsuit against the Small Business Administration based on the administration’s failure to allow for PPP loans to companies in bankruptcy. Alpha Media, which filed for bankruptcy in January, contends that the SBA is rejecting PPP applications from debtors even though “it was not Congress’ intent for the SBA to use an applicant’s status as a Chapter 11 debtor as a basis to deny it PPP relief.” Several companies in bankruptcy have sued the SBA administrator with similar claims over the past year, with mixed results. [Bloomberg Law; April 7, 2021]
Yahoo Finance reports that China Huarong Asset Management Co. is considering asset sales in an effort to avoid a wholescale restructuring. The state-owned manager of non-performing loans, which spooked investors earlier this month when it delayed its earnings report, is still determining which assets it might consider selling. [Yahoo Finance; April 8, 2021]
Yahoo Finance also reports that the U.S. government posted a March budget deficit of $660 billion, a record high for the month and the third highest U.S. monthly budget deficit on record. Much of the deficit resulted from payments under the recently-approved $1.9 trillion stimulus package and, with more funding from the stimulus package expected to roll out in coming months, U.S. Treasury officials expect deficit levels to remain elevated. [Yahoo Finance; April 12, 2021]
Trial began in the National Rifle Association’s bankruptcy on April 6 on motions seeking appointment of an examiner or an independent trustee over the NRA, or dismissal of the bankruptcy case entirely. The Wall Street Journal reports that, in his testimony, NRA CEO Wayne LaPierre made headlines by acknowledging his failure to disclose overseas yacht trips, paid for by NRA vendors, and other potential conflicts of interest. And Bloomberg Law reports that the NRA is seeking appointment of a chief restructuring officer to help it navigate bankruptcy and other possible reforms. [The Wall Street Journal; April 7, 2021; Bloomberg Law; April 8, 2021]
