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Latin American vehicle importer and distributor Automotores Gildemeister SpA has filed for bankruptcy protection in the U.S. with a prepackaged reorganization plan to cut about $200 million in debt, WSJ Pro Bankruptcy reported. The Santiago, Chile-based company, along with 12 affiliates, filed for chapter 11 Monday in the U.S. Bankruptcy Court in New York. The privately held company had warned earlier this month that it would file for reorganization in the U.S. with support from its international noteholders. The bankruptcy includes its businesses in Chile, Uruguay and Brazil, and excludes the operations in Peru and Costa Rica. Automotores Gildemeister, or AG, imports, distributes and sells new and used vehicles, provides maintenance and repair services, and brokers insurance and financing services. The company sells 12 brands, primarily Hyundai, through 70 company-owned vehicle dealerships, including 46 in Chile, 19 in Peru, 3 in Uruguay and 2 in Costa Rica. It also distributes vehicles to 158 franchised dealerships in Chile and Peru. The company has struggled financially due the Covid-19 pandemic and related government-mandated lockdowns, the sustained increase in the currency exchange rate in recent years and social unrest in Chile in October 2019 that have sapped consumer confidence and eroded demand for vehicles, according to court papers.

In March, small-business owners felt the most optimistic since the onset of the coronavirus pandemic more than a year ago, a new survey shows, but they are still being very cautious about future plans, MarketWatch.com reported. The closely followed optimism index compiled by the National Federation of Independent Business climbed to a pandemic high of 98.2 last month from 95.8 in February. That’s roughly in line with the survey’s historic average The index is still well below pre-pandemic levels, however. The index stood near an all-time high of 104.5 in February 2020, just a month before the pandemic erupted. mall businesses have been helped by the lifting of state restrictions this year after a sharp decline in coronavirus cases. Sales have improved and many companies are trying to hire. One of their biggest problems is finding suitable workers, a seeming oddity given a huge drop in employment during the pandemic. More than 8 million people who held jobs last year are no longer working. A record 42% of small businesses surveyed said they could not fill open jobs. Small businesses say generous government unemployment benefits are keeping some workers from applying for jobs, but labor shortages go back at least several years.

President Biden vowed yesterday that the size and scope of his $2.25 trillion jobs plan — as well as how to pay for it — is up for negotiation, setting the stage for what is likely to be months of congressional wrangling on one of the White House’s chief legislative priorities, the Washington Post reported. Whether a bipartisan deal ultimately materializes is far from clear, however, as a top GOP senator told Biden in a private Oval Office meeting Monday that it would be “almost impossible” to win over Republicans if the plan envisions boosting the corporate tax rate, as it currently does. There is also widespread private skepticism among congressional Republicans that the White House is genuinely open to a cross-party agreement that might significantly scale back Biden’s ambitions. But the president, as well as White House officials, insisted that his overtures at bipartisanship were earnest and that he would not have been spending hours meeting with Republicans otherwise. Read more.

What implications does the American Jobs Plan have for the economy and restructuring industry? Don't miss the "Politics, the Economy and Insolvency: Updates from D.C." on Thursday at ABI's Annual Spring Meeting. Register here.

Last March, the government provided U.S. airlines a $50 billion lifeline in one of the largest industry-wide interventions in American history. The industry received a further $29 billion through the bipartisan year-end relief package and President Joe Biden’s stimulus plan. The enormous volume of support raises a question, according to a Bloomberg commentary: Was this in taxpayers’ interest, or was it a classic case of corporate welfare that primarily benefited shareholders? A careful examination of the record shows that the initial intervention during the height of the panic was certainly the best available alternative. But more recent support to an industry the government had already stabilized raises questions about the marginal return on taxpayer dollars. With airlines now adding routes as part of the broader economic recovery, it's easy to forget how precarious the future of the industry was a year ago. The general economic shock from the virus was unprecedented, but the speed and scope of the impact on the aviation industry was particularly breathtaking. More than 95 percent of demand evaporated almost overnight.

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

United Airlines said it expects first-quarter revenue to drop by 66%, which is near the lower end of its prior forecast, buoyed by improving demand for domestic travel, Reuters reported. The company said that it now expects first-quarter revenue to fall 66% to $3.2 billion from the same period in 2019. It had previously forecast a drop of between 65% and 70%. The airline said its average daily cash burn for the quarter is expected to be about $9 million per day, an improvement of about $10 million compared to the fourth quarter of 2020.

Encouraged by government efforts to pump money into the economy and signs that Americans are spending more, the largest financial institutions are expected to release some of the rainy-day money they set aside after the coronavirus pandemic hit, the Wall Street Journal reported. That will offer a jolt to their income in the first three months of the year. JPMorgan Chase & Co., Wells Fargo & Co. and Goldman Sachs Group Inc. will disclose financial results on Wednesday. Bank of America Corp. and Citigroup Inc. report Thursday and Morgan Stanley follows on Friday. Analysts forecast that all of them will post first-quarter profits that are far above year-earlier levels. Already, investor expectations are high. The KBW Nasdaq Bank Index, which tracks shares of the largest lenders, is up 27% so far this year, nearly triple the gains of the S&P 500. “The U.S. economy will likely boom,” JPMorgan Chase Chief Executive Jamie Dimon wrote in his annual letter last week. “This boom could easily run into 2023 because all the spending could extend well into 2023.” Banks had set aside tens of billions of dollars in reserves to prepare for a wave of loan losses. Those reserves were booked against profits, depressing income for the first half of last year.

The Small Business Administration on April 8 issued a procedural notice to lenders regarding the extension of the Paycheck Protection Program, according to the ABA Banking Journal. Pursuant to the PPP Extension Act of 2021, SBA said that it would shut down its PPP platform to new PPP loan guaranty applications at 12 a.m. EDT on June 1. SBA will then have an additional month to process any pending applications, before shutting down processing on 12 a.m. EDT on July 1. The SBA last week also issued an update to its frequently asked questions on the PPP. The new answer provides clarity regarding when an applicant or owner is no longer considered to be “presently involved in any bankruptcy” for PPP loan eligibility purposes. Chapter 7 bankruptcy filers will no longer be considered “presently involved in any bankruptcy,” after the bankruptcy court enters a discharge order in the case. For chapter 11, 12, or 13 bankruptcy filers, the bankruptcy court must enter an order confirming the plan in the case. For any type of bankruptcy, if the bankruptcy court has entered an order dismissing the case, applicants or owners will no longer be considered “presently involved in any bankruptcy” for purposes of the PPP. SBA noted that “the discharge order, the order confirming the plan or the order of dismissal, whichever is applicable, must be entered before the date of the PPP loan application.” Click here to read SBA's Procedural Notice.

Small business closures across the U.S. and the world are creeping back toward their pandemic peaks, according to a report from Facebook and the Small Business Roundtable, CNBC.com reported. “It continues to be a very painful time for small businesses,” John Stanford, co-executive director of the Small Business Roundtable, told CNBC’s “Worldwide Exchange” on Thursday. The report, which surveyed over 35,000 small and medium-size businesses across the world, found that 22% of U.S. small businesses were closed in February. Those figures were up from October’s 14%. At the peak in May, the pandemic saw 23% of small and medium-size businesses closed — only 1 percentage point higher than the current closure rate. While the overall closures are nearing Covid highs, the report found that different areas of the country were experiencing varying degrees of difficulty. Some states, like Maine, Idaho and Colorado, were seeing 9%-10% closures, while others like New York, Pennsylvania, and Massachusetts were seeing at least 30% closed. Within states, the report also found that certain demographics were getting hit harder than others: 27% of minority-led small and medium-size businesses reported closures, compared with 18% of others. Female-led businesses saw 25% closure rates, while 20% of male-led businesses closed.