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Costa Hollywood Beach Resort’s unsold units were slated for a bankruptcy auction and generated plenty of interest but no qualified bidders, more than likely because the coronavirus pandemic put the hospitality industry in a historic nosedive, Law.com reported. 777 N. Ocean Drive LLC, the lender on the project that sought to foreclose on the development team after it stopped paying, is in line to buy the unsold units under its $43 million stalking-horse bid. The lender, an affiliate of New York-based private equity firm Madison Realty Capital, offered a credit bid, which counts against the overdue loan. Bankruptcy Judge A. Jay Cristol of the Southern District of Florida set a hearing on a final sale for Aug. 26. “In this market, especially after COVID hit, it’s a little bit harder to take out a secured lender that’s coming in with a credit bid of $43 million. It’s a lot of money,” said debtor’s attorney James Moon. Moon, a partner at Meland Budwick in Miami, said he doesn’t know if the pandemic is to blame but guesses that’s the reason for an absence of bidders. Over 180 groups expressed interest, signing confidentiality agreements with broker Cushman & Wakefield, but none qualified. The 326-unit Costa Hollywood condominium-hotel became distressed before the coronavirus pandemic. The lender, which issued $70 million in project financing in 2016, filed for foreclosure in Broward Circuit Court in April 2019 against the development group, Costa Hollywood Property Owner LLC. It’s led by developer Moses Bensusan, CEO of the Liberty Grande LLC real estate firm. Costa Hollywood, which owns 43 unsold residential units, nine commercial units and the common area, filed for chapter 11 reorganization last September. Qualified bids were due last Thursday, but with no bidders an auction scheduled for Monday wasn’t held.

Speedcast International Ltd.’s largest secured lender is trying to top Centerbridge Partners LP’s $395 million offer to buy the satellite communications company out of bankruptcy, WSJ Pro Bankruptcy reported. Black Diamond Capital Management LLC on Thursday submitted a bid to acquire Speedcast’s assets and challenge Centerbridge for control of the company, these people said. The Black Diamond bid came a day after Speedcast, which connects cruise ships and oil rigs to internet and phone services, filed court papers laying out a proposed equity sale to Centerbridge. Speedcast is scheduled to appear today in the U.S. Bankruptcy Court in Houston to seek permission to cover expenses in connection with Centerbridge’s equity commitment. The company has proposed folding Centerbridge’s offer into a chapter 11 repayment plan that would, if approved, pay off Speedcast’s $180 million bankruptcy loan in full while covering only a fraction of the company’s roughly $600 million in remaining secured debt. Black Diamond has said that its bid ascribes a higher value to Speedcast and would deliver a $165 million recovery to the secured debt, compared to $39.5 million under the Centerbridge bid, according to one of the people familiar. Speedcast hasn’t formally responded to Black Diamond’s bid, which would take the form of an asset sale.

Two of J.C. Penney Co.’s largest landlords have emerged as the leading contenders to acquire the department-store chain’s retail business out of bankruptcy, the Wall Street Journal reported. Simon Property Group Inc., the biggest mall owner in the U.S. by number of malls, and Brookfield Property Partners LP, another big shopping center owner, have joined together and are in advanced talks to purchase Penney’s retail operations, people familiar with the matter said. In recent days, the pair have eclipsed other interested bidders. Penney reviewed a competing offer from private-equity firm Sycamore Partners that carried a slightly higher price tag. But Simon and Brookfield offered certain concessions over lease agreements that Penney and its lenders viewed as delivering better value. Penney is one of Simon’s top anchor tenants, second only to Macy’s Inc. If a deal comes together, it would save Penney from a possible liquidation and mark another acquisition by Simon of a bankrupt tenant. The company was part of a group that bought Forever 21 Inc. out of chapter 11 in February and Aéropostale Inc. in 2016. Simon also has agreed to buy Brooks Brothers out of bankruptcy for $325 million in a joint bid with apparel-licensing firm Authentic Brands Group LLC.

Hospital operator Verity Health System of California Inc. won bankruptcy-court approval to sell a Los Angeles-area facility to Prime Healthcare Services Inc. for more than $350 million despite objections from the state attorney general and an opposing bidder, the Wall Street Journal reported. California Attorney General Xavier Becerra, a Democrat, had set 21 conditions for the sale of St. Francis Medical Center in Lynwood, Calif., to Prime, three of which Verity challenged as overly burdensome. The attorney general opposed authorizing the sale of St. Francis to Prime and objected to Verity’s chapter 11 liquidation plan. However, Judge Ernest Robles of the U.S. Bankruptcy Court in Los Angeles overruled the objections yesterday, paving the way for St. Francis to be sold free and clear of the regulatory obligations asserted by the attorney general. The judge also said he would confirm Verity’s liquidation plan. The company filed for bankruptcy protection in 2018.

Bankrupt Brooks Brothers Group Inc. agreed to be bought Authentic Brands Group LLC and an entity it owns with mall landlord Simon Property Group Inc. after getting the bidders to pay an added $20 million for the two-century-old men’s clothing retailer, Bloomberg News reported. Authentic Brands and Sparc Group LLC will pay $325 million and expects to keep at least 125 locations open. Authentic recently bought Barneys New York out of bankruptcy and specializes in turning around beaten-down apparel brands. Simon, one of the biggest U.S. mall operators, needs tenants like Brooks Brothers to attract shoppers. The duo had previously disclosed they were bidding $305 million in a court-supervised auction for Brooks Brothers’ global business operations. WHP Global, owner of the Joseph Abboud and Anne Klein brands, dropped out after saying Brooks Brothers had discouraged it from making a higher bid. Brooks Brothers said on July 8 when it filed for bankruptcy that it had about 500 stores worldwide in 45 countries, with 200 in North America.

Families of nine victims of the Sandy Hook school shooting are challenging weapons maker Remington Outdoor Co.’s proposal to quickly sell its assets in bankruptcy, asking how the company landed back in chapter 11 at a time when Americans are buying guns at record levels, the Wall Street Journal reported. In a court filing Friday, lawyers suing Remington over the 2012 mass killing of 20 children and six school staff members in Newtown, Conn., questioned how the company found itself in such desperate financial shape after wiping away hundreds of millions of dollars in debt in a previous bankruptcy in 2018. Remington filed for chapter 11 protection again last month, saying that even with Americans stocking up on guns and ammunition, it couldn’t profit because its cash is tied up by lenders. Gun sales have been driven by civil unrest sparked by the COVID-19 pandemic and the killing of George Floyd by police. The company said it wouldn’t last long without finding a buyer. The Sandy Hook families said on Friday that they aren’t convinced and questioned the company’s motivations for seeking bankruptcy protection, asking for a delay in the bankruptcy sale process. Remington has agreed to delay hearings on its sale process by a week, to give a newly appointed creditors committee time to weigh in.

Hertz Global Holdings Inc. is seeking debtor-in-possession financing more than two months after filing for chapter 11 protection, reflecting the reality that it still faces trouble ahead if travel doesn’t bounce back, Bloomberg News reported. The bankrupt rental-car giant said in a regulatory filing yesterday that it is looking for new sources of cash with the travel business in a deep slump and proceeds from the sale of its cars going to pay off creditors. Hertz had sought to avoid raising funds while it negotiates a debt restructuring with asset-backed securities holders, but the deterioration in its core rental business and uncertainty ahead leaves it with few options. The company’s revenue fell 67% in the second quarter, pushing it $847 million into the red on a net-income basis. With $1.4 billion in cash on hand, Hertz said that its continued ability to finance operations depends on a recovery in demand in key markets and an extension from creditors of waivers on payments for its cars in continental Europe and the U.K., the filing said. The company said that it saw demand rise every month in the most recent quarter, but it remains below pre-pandemic levels. Without an extension beyond Sept. 30, Hertz must start making payments on its European fleet, which is owned by investors who hold its asset-backed securities. Hertz already has reached an agreement allowing it to use much of its U.S. fleet with a commitment to pay securities holders $108 million a month from July until the end of the year. To do that, Hertz plans to shrink its U.S. fleet by at least another 182,000 vehicles after selling off 100,000 cars in June and July. Read more. 

In related news, Hertz Global Holdings Inc. raised $29 million selling its likely worthless stock before regulators dissuaded the bankrupt rental-car company from selling more, MarketWatch.com reported. The Florida-based company, which filed for chapter 11 protection in May, on Monday disclosed the results of a controversial effort to sell as much as $500 million in shares despite the severe financial strains that drove the company into bankruptcy. Hertz launched the stock sale after its bankruptcy filing, hoping to capitalize on a speculative frenzy fueled by risk-hungry day traders that gave the company a golden opportunity to raise capital it needed to cover its bills. Bankruptcies typically wipe out shareholders, and Hertz warned in June its bankruptcy "may render our common stock worthless." Its shares nonetheless went on a gravity-defying rally after its bankruptcy filing, as investors on the popular Robinhood trading app piled in. Hertz suspended the stock sale after the Securities and Exchange Commission raised questions, but not before issuing 13.9 million shares, netting $29 million, according to a securities filing by the company on Monday. The stock closed at $1.69 on Monday, implying a $240 million market capitalization. Read more. 

Brand-licensing company WHP Global Inc. has bowed out of the race for Brooks Brothers Inc., according to people familiar with the matter, leaving a venture backed by apparel-licensing firm Authentic Brands Group LLC and mall owner Simon Property Group Inc. poised to take control of the bankrupt retailer, the Wall Street Journal reported. Like Authentic Brands, WHP Global buys consumer brands, often out of bankruptcy, and revives them by shedding unprofitable locations. Sparc Group LLC, the Authentic Brands-Simon venture, had bid $305 million for Brooks Brothers last month. That “stalking horse” offer includes a commitment to keep 125 Brooks Brothers stores open. The retailer has roughly 200 stores in North America. The Sparc offer had been subject to better bids, but the deadline for rival offers passed last week. WHP and Sparc had been vying to buy Brooks Brothers since before the retailer filed for bankruptcy. WHP had submitted a bid for $334 million for Brooks Brothers in July, but the retailer deemed Sparc’s offer a better deal. The firms also competed to provide Brooks Brothers a loan to finance its bankruptcy proceedings, a battle won by Sparc. Given that, WHP decided not to move forward with its offer.

Sur La Table Inc., the bankrupt upscale cookware chain, sold for almost $90 million and a promise to keep at least 50 stores open, according to court papers, Bloomberg News reported. A joint venture between e-commerce investment firm CSC Generation and Marquee Brands topped an opening bid from affiliates of Fortress Investment Group at auction last week, according to court papers and a lawyer for Sur La Table’s junior creditors. A representative for Sur La Table didn’t respond to requests for comment, while CSC founder Justin Yoshimura and Marquee didn’t immediately respond to emails seeking comment Monday evening. Sur La Table, known for its in-store cooking classes and pricey kitchenware, shut its stores as COVID-19 gripped the U.S., then filed for chapter 11 bankruptcy in July. The company was headed toward a full-blown liquidation until Fortress stepped in with a stalking-horse bid. The sale still needs bankruptcy court approval. A successful sale of the chain would save some 2,000 jobs, the company said in previous court papers. The retailer, founded in 1972, had 121 stores across the U.S. when it filed for bankruptcy, according to a statement at the time. CSC Generation was founded in 2016 and has since bought the intellectual property of bankrupt department-store chain Bon-Ton Stores Inc. and home decor chain Z Gallerie. Marquee is a brand management firm owned by investor funds managed by Neuberger Berman. The case is SLT Holdco Inc., 20-18368, U.S. Bankruptcy Court for the District of New Jersey (Trenton).

A bankruptcy judge has approved the purchase of the XFL by former WWE wrestler Dwayne “The Rock” Johnson, Dany Garcia, and RedBird Capital, NBCSports.com reported. The assets were acquired for $15 million. Unsecured creditors had objected to the sale. With no other viable purchasers, however, the judge approved the bid.