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The chief executive officer of AMC Entertainment Holdings Inc. said the movie-theater chain is once again “under attack” from short sellers after skirting bankruptcy during the COVID-19 pandemic, Bloomberg News reported. The volume of short sales — bets that the stock will go down — rose about 50% in March to 73.8 million shares, CEO Adam Aron said in a discussion with the social-media finance commentator Trey Collins. In a wide-ranging interview, he also touched on a proposal to raise new equity and praised the meme investors who bid the stock up to more than $20 a share in January. The shares have since retreated from that lofty level. But they rose as much as 9.4% on Thursday after Aron said he has no immediate plans to issue any of the 500 million new shares the company is asking shareholders to authorize. The company won’t seek to sell those shares in 2021 but rather in the coming years. Aron is seeking to carry out a long-term growth plan that could silence AMC’s doubters. “There are strategies we have that are very good for AMC, to come out of this pandemic, to rebuild this company,” Aron said. “But not only get back to where we were, I’d like to keep going. And I’d like to grow this company even more so.” Aron also reflected on the difficult stretch the theater chain endured. In 2019, revenue averaged $450 million a month. It slumped virtually to zero a little over a year ago, after the pandemic forced theaters to close. The chain was weeks away from running out of cash at least five times, and has since restructured its finances, banking enough cash to last through most of 2021. Other theaters have succumbed to the COVID-19 struggle. ArcLight Cinemas and Pacific Theatres, two jointly owned California movie-theater chains, announced plans this week to close permanently, underscoring the still-tenuous state of the industry.

The U.S. Congress will hold hearings next month with the chief executives of major Wall Street banks as Democratic lawmakers step up scrutiny of the role lenders have played in helping struggling Americans recover from the COVID-19 pandemic, Reuters reported. The House Financial Services Committee and the Senate Banking Committee will hear testimony from JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley, according to a notice from the House of Representatives committee. The virtual hearings scheduled for May 26 and 27 could determine how much legislative and political risk the biggest banks will face through 2022, Jaret Seiberg at Cowen Washington Research Group wrote on Thursday. While the industry's image in Washington has improved since the financial crisis a decade ago, Democratic lawmakers have expressed skepticism that lenders are doing all they can to help Americans and small businesses hurt by the pandemic. They are likely to grill the CEOs on the industry's role in the small-business Paycheck Protection Program and ask them to address concerns, flagged by several congressional reports, that lenders dished out the cash to fraudsters and discriminated against some borrowers.

Hospitality Investors Trust Inc. is nearing a deal that would hand control of the debt-laden hotel operator to Brookfield Asset Management as part of a pre-packaged bankruptcy, Bloomberg News reported. HIT, which owns about 100 hotels across the U.S., has been getting advice from law firm Proskauer Rose and investment bank Jefferies Financial Group Inc. on the restructuring talks. The real estate investment trust said in a regulatory filing last week that it was negotiating with Brookfield, its largest investor, over a potential chapter 11 filing. Hospitality Investors Trust is the latest U.S. hotel operator to consider bankruptcy after the COVID-19 pandemic spurred a slowdown in global travel. REIT Eagle Hospitality Trust filed for chapter 11 earlier this year, as have several individual hotels across the country. The REIT owns older hotels with Marriott International Inc., Hilton Worldwide Holdings Inc. and Hyatt Hotels Corp. branding. Its top markets by room are Orlando, Florida, Atlanta, and West Palm Beach/Boca Raton, Florida, according to its website and annual report. Hospitality Investors Trust no longer has sufficient cash fund its obligations and Brookfield is the only likely provider of additional liquidity, according to its 2020 annual report. Brookfield holds all of its preferred equity, worth about $441 million, and Hospitality Investors Trust converted the cash payment to payment-in-kind in December to preserve liquidity. Read more. 

Hotel debtors were the focus of a session at ABI’s Annual Spring Meeting going on now through April 22. Register today to access live programming, replays of past sessions and tap in to unparalleled networking. 

Federal Reserve Chairman Jerome Powell said Wednesday that the central bank will begin to slow the pace of its bond purchases “well before” raising interest rates, the Wall Street Journal reported. The Fed has been buying at least $120 billion a month of Treasury debt and mortgage-backed securities since last June to hold down long-term borrowing costs. Since December, the central bank has said the economy must make “substantial further progress” toward its goals of maximum employment and 2% inflation before it scales back those purchases. “We will taper asset purchases when we’ve made substantial further progress toward our goals, from last December when we announced that guidance,” Mr. Powell said in a virtual event held by the Economic Club of Washington, D.C. “That would in all likelihood be before — well before — the time we consider raising interest rates.” The Fed has said that it will hold rates near zero until it sees the labor market return to full employment and inflation rise to 2% and is forecast to moderately exceed that level for some time. Mr. Powell reiterated that he thinks it is highly unlikely that the Fed would raise interest rates this year and noted that most central-bank officials see rates remaining near zero through 2023.

Avis Budget Group Inc.’s stock closed at a record high yesterday as an economic reopening that’s boosting travel demand collides with industrywide inventory tightness, Bloomberg News reported. Shares of Parsippany, N.J.-based Avis rose 1.9% to $77.24, more than doubling so far this year and soaring from a pandemic low of $7.78 in March 2020. The industry is raising prices as post-vaccination business and leisure travel surges and household-name rental companies don’t have enough cars for customers to drive off the lot. The firms are adding cars back to their fleets, but cautiously. During the early months of the pandemic, Avis and rivals Hertz Global Holdings Inc. and Enterprise Holdings Inc. sold large portions of their inventory and cut costs severely to shore up finances as U.S. travel ground to a halt. Now, their ability to restock cars is also being hampered by automakers pausing production due to a global semiconductor shortage. Automakers’ sales to fleet customers fell about 30% in the first quarter, according to analyst estimates. Carmakers are seeing nascent signs of increased fleet demand but are prioritizing sales to higher-margin retail buyers. “Fleet is definitely coming back,” Judith Wheeler, Nissan Motor Co.’s vice president for U.S. sales, said in an interview April 1. “We will try to do our part to give them some inventory, but we’re going to focus on retail.” Even so, Avis shares continue to soar as main rival Hertz faces restructuring from bankruptcy and analysts see tailwinds from the pandemic lasting into the second half of this year.

The Collected Group, which owns lifestyle brands Joie, Current/Elliott and Equipment, has filed a petition under chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware, Fibre2Fashion.com reported. The U.S. company, which closed stores even before the pandemic, plans to focus on e-commerce and wholesale, according to the company’s filings on April 12. The company plans to use the bankruptcy proceedings to facilitate those store closures and cut more than 80 percent of its debt, it said in a statement. James Miller, the chief executive officer since 2017, will step down and take on an advisor title and be on the company’s board. The new CEO will be Silvia Mazzucchelli, a board member who was also the former CEO of Modcloth. The bankruptcy filing follows dwindling sales, liquidity issues and a disrupted sale process, all of which have been attributed to the COVID-19 pandemic. The company, which was founded in 2001 and is owned by private equity firm KKR, owned 33 branded stores across the US at its peak. With store closures during the pandemic, retail revenues fell by 85 percent in 2020 and wholesale revenues by 70 percent. E-commerce, however, grew 37 percent during the year to $27.8 million, which was about half the company’s revenues for the year.

Fast-casual chain Meatheads Burgers & Fries, which has received more than $2.4 million in PPP funding, has declared bankruptcy, Restaurant Business reported. The chain, which lists 13 locations around the Chicago area on its website, filed for chapter 11 protection in the Northern District of Illinois on Friday, as did its owner Crave Brands, LLC. But the company's lender is not so sure. LQD Financial Corp. filed a motion to dismiss the case on Tuesday, saying that the bankruptcy filing was a “stunt Crave’s former manager pulled to stay in charge” and that the filings were made in bad faith. In its chapter 11 filing, Meatheads said it had liabilities totaling $8.4 million with total assets of $6.7 million. The chain received a Paycheck Protection Program loan of $982,112 in 2020 and nearly $1.44 million in PPP funding during the second round this year. Crave Brands, LLC, the owner of Meatheads which also filed for bankruptcy protection on Friday, received an Economic Injury Disaster Loan for $149,000.

The coronavirus pandemic made the legal system in New York much friendlier toward commercial property owners with assets in default who are facing a foreclosure sale under the Uniform Commercial Code (UCC). But, it looks as though the empathy is starting to run out, according to a commentary in the Commercial Observer reported. A ruling by Justice Jennifer Schecter in the First Department of the Appellate Division of the New York Supreme Court last month has made it more difficult for borrowers and their counsel to claim hardship and economic uncertainty caused by the pandemic as a reason to enjoin, or avoid, a UCC Article 9 foreclosure auction. The decision, in Shelbourne BRF LLC et al. v. SR 677 Bway LLC, has also likely “opened the floodgates” to a potential wave of last-resort chapter 11 bankruptcy filings from borrowers who fail to receive injunctive relief to stop UCC auction sales and save their interests in properties, according to lawyers and brokers who examined the decision. Through the pandemic, market volatility made it easier for courts to deem a UCC foreclosure sale “commercially unreasonable,” thus hampering a lender’s ability to work through default scenarios. Typically, if a borrower seeks injunctive relief to halt a UCC foreclosure sale, it’s up to them to showcase the possibility of irreparable harm as a result of it — by detailing to the court the negative effects of the loss of equity interest in a property’s controlling entity from the foreclosure sale. Judge Schecter essentially stamped that out last month, determining that a borrower’s threatened loss of equity interest does not represent irreparable harm.

U.S. Bankruptcy Judge Jerry Funk issued an order confirming Stein Mart Inc.’s chapter 11 plan that pays off secured and priority claims in full but only a fraction of unsecured claims, the Jacksonville (Fla.) Daily Record reported. The April 13 order also cancels Stein Mart’s stock. Judge Funk had said at an April 8 hearing in U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, that he would confirm the plan. Jacksonville-based Stein Mart filed its chapter 11 petitions Aug. 12 and began winding down operations, closing the last of its 281 stores Oct. 26. “The Debtors have proposed the Plan in good faith, with the legitimate and honest purpose of maximizing the value of the Debtors’ Estates for the benefit of their stakeholders,” Judge Funk said in his order.

COVID-19 is hitting business owned by Asian Americans on multiple fronts, Reuters reported. Pandemic related closures and restrictions on indoor gatherings were particularly hard on the restaurants, stores, nail salons and other service industries in which many Asian-owned firms are concentrated. Language barriers and a dearth of banking relationships made it difficult for some business owners to access government aid, even as they coped with an added layer of fear amid a surge in hate crimes linked to racist rhetoric that blames Asians for the coronavirus. According to a report here released last month by the New York Federal Reserve and AARP that focused on older entrepreneurs who make up 80% of all small business owners, small firms owned by Asian Americans fared worse than those owned by Black Americans and Hispanic Americans — despite going into the pandemic in a stronger economic position. Some 9% of firms owned by Asian Americans were financially “distressed” in 2019 — far lower than the 19% of Black owned firms and 16% of Hispanic owned businesses given that rating based on their profitability, credit score, and business funding, according to New York Fed research. Among white-owned firms, the figure was 6%.