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While 2020 was the year when COVID-19 hit home, 2021 is expected to be the year when the economy and everyday life returns to normal, more or less. That should bring more jobs, higher incomes and less financial stress generally. But the new year also will mark a time when millions of Americans continue to grapple with the financial fallout from the pandemic, the Arizona Republic reported. Improvement won't come overnight, and some problems — tax payments, debts and saving deficits — could get worse before they get better. Some 53% of Americans said they were worried about tax debt in 2021 including 76% who lost work during the pandemic, according to a survey released in December by LendEDU. Top reasons for concern included taxable withdrawals from retirement plans, taxes that resulted from selling stocks or other assets, and taxes on jobless benefits. About 10% of respondents said they weren’t able to file and pay all of their 2019 tax obligations by the extended July 15, 2020, deadline. A wave of bankruptcy filings did not happen in 2020, thanks largely to expanded jobless benefits, stimulus payments, Paycheck Protection Program business loans, foreclosure moratoriums, landlord forbearance and other help. In fact, consumer bankruptcy filings last year ebbed to their lowest level since 1987, according to the American Bankruptcy Institute. Total filings, including for businesses, fell 30 percent last year. Many consumers and businesses have been "sitting on the edge," waiting to see if conditions improve this year before they file for bankruptcy, said Amy Quackenboss, executive director of the American Bankruptcy Institute. "They're waiting to see if things get back to normal." Some individuals might dig out of their holes, especially if jobs return big time to industries such as lodging and restaurants as the economy recovers and lockdowns ease. But many businesses, already suffering, might not make it, which could lead to permanent job losses, Quackenboss said. Business bankruptcies already are rising. Quackenboss said she expects consumer filings also will increase, at least back to 2019 levels, in the coming year. However, she added that it's difficult to predict the timing as so much depends on efforts to suppress the virus and the length that federal and other assistance programs stay in place.

The U.S. government today is set to re-open its signature small business pandemic aid program with $284 billion in new funds and revamped rules that aim to get cash to the most needy businesses while stamping out fraud and abuse, Reuters reported. The Small Business Administration (SBA) announced on Friday that it would launch a third round of the Paycheck Protection Program (PPP) this week, starting with small community financial institutions on Monday, and larger lenders in coming days. By prioritizing smaller lenders, the SBA hopes to address criticism from lawmakers that minority and women-owned businesses did not get enough money during the first two PPP rounds last year compared with bigger businesses. Administration officials told reporters on Friday they expected the funds would be sufficient to meet demand. Under the program, lenders on behalf of the government distribute loans that can be forgiven provided the cash is spent on eligible costs, such as payroll and rent. To date, the PPP has distributed $525 billion through more than 5 million loans. Congress authorized the new funds last month as part of another pandemic stimulus package which also loosened PPP rules on who can get cash and what it can be spent on. Among the key changes, companies which took cash during the first two rounds will be allowed a second PPP loan provided they can show a 25% hit to their revenues. To address worries over fraud, the SBA is also introducing new due diligence checks. While lenders say the changes are positive, some are worried they may cause some initial snags, especially as the updated application forms and SBA rule guidance were only released on Friday.

Restaurant franchisee NPC International Inc. has settled all the major disputes that had threatened to hold up a plan to sell its Pizza Hut locations to Flynn Restaurant Group, lawyers told a federal bankruptcy judge on Friday, Bloomberg News reported. Pizza Hut attorney Charles Gibbs said during a video court hearing that the company expects to sign a consent agreement in the next few days with Flynn, allowing the restaurateur to close a deal to buy NPC’s operations of the chain. When NPC filed for bankruptcy last year, it operated more than 1,200 Pizza Hut locations and nearly 400 Wendy’s Co. restaurants. In November, NPC called off auctions for its Pizza Hut and Wendy’s restaurants because the offers were too low, an NPC lawyer said last month. Instead, the company entered settlement talks that ultimately led to the current deal. The agreement will see Flynn purchase the Pizza Hut locations, while a group of Wendy’s franchisees will buy the burger restaurants. Wendy’s has agreed to be the backup buyer for the burger locations in case the agreement with franchise holders falls through, a lawyer for the fast-food chain said during the hearing.

Houston-based specialty apparel retailer Francesca's Holding Corp. is one step closer to selling its business to a private investor, the Houston Business Journal reported. The U.S. Bankruptcy Court for the District of Delaware has approved the company's auction process, Francesca's announced Jan. 8. Bids are due by 4 p.m. Eastern Time on Jan. 13, and the auction is set for 10 a.m. Eastern Time on Jan. 15. The auction will only be held if Francesca's receives one or more qualified bids. If not, Francesca's will seek the bankruptcy court's approval of its stalking-horse asset purchase agreement. Francesca's also announced Jan. 8 that it formalized the stalking-horse agreement with an affiliate of Los Angeles-based TerraMar Capital LLC and with New York-based Tiger Capital Group LLC. The buyers have agreed to purchase substantially all of the assets of Francesca's and its subsidiaries for approximately $17 million in cash, subject to certain adjustments, plus the assumption of substantial liabilities. Francesca's filed for chapter 11 protection on Dec. 3 with plans to sell itself. At the time, Francesca's and TerraMar had signed a letter of intent regarding a stalking-horse bidder agreement, and the retailer said that it wanted to hold an auction as expeditiously as possible.

Cyc Holdings LLC, which had hoped to salvage its spin-class business through a chapter 11 reorganization, has switched instead to a chapter 7 liquidation, WSJ Pro Bankruptcy reported. The operator of Cycle House, Zengo Fitness and Cyc Fitness centers had entered bankruptcy in October with roughly eight locations in Washington D.C., New York and California, and planned to reduce the number of studios to three or four during its bankruptcy. But last month the company said that a feasible reorganization was looking increasingly unlikely as the coronavirus pandemic continued to severely curtail its business. To buy itself time, Cyc said it wanted to dismiss the bankruptcy, saying chapter 11 proceedings were costly and that a conversion to chapter 7 would be a “death knell.” Cyc said a dismissal was preferable, as it would allow the company to determine whether salvaging the business was possible. The company entered bankruptcy with about $1.8 million in debt, according to a court filing. Heading into a virtual hearing Thursday in U.S. Bankruptcy Court in Wilmington, Del., a landlord objected to the bankruptcy being dismissed, instead preferring chapter 7 as one of the options. Cyc said at the hearing that its prospects had worsened due to a rise in COVID-19 cases in the wake of the holidays, along with worries about a new coronavirus variant. According to statements made in court, the company’s sole remaining employee is President Marc Caputo.

The U.S. economy shed jobs for the first time in eight months in December as the country buckled under an onslaught of COVID-19 infections, suggesting a significant loss of momentum that could temporarily disrupt the recovery from the pandemic, Reuters reported. The plunge in nonfarm payrolls reported by the Labor Department on Friday was concentrated in the coronavirus-sensitive leisure and hospitality sector, which lost nearly half a million jobs. But with other industries including retail, manufacturing and construction performing better, the economy is unlikely to tip back into recession. Nearly $900 billion in additional pandemic relief approved by the government in late December will probably provide a backstop. More fiscal stimulus is expected now that Democrats have gained control of the U.S. Congress, boosting the prospects for President-elect Joe Biden’s legislative agenda. Payrolls decreased by 140,000 jobs last month, the first decline since April, after increasing by 336,000 in November. The economy has recovered 12.4 million of the 22.2 million jobs lost during the pandemic. Economists polled by Reuters had forecast 71,000 jobs would be added in December. The leisure and hospitality sector lost 498,000 jobs last month, with employment at bars and restaurants tumbling 372,000, accounting for three quarters of the drop. Restaurants and bars in many states, including New York and California, were shut during the holidays to slow the spread of the virus.

NPC International Inc., the bankrupt Wendy’s and Pizza Hut franchisee, agreed to sell its restaurants in separate deals worth roughly $800 million involving Flynn Restaurant Group LLC and Wendy’s International LLC, WSJ Pro Bankruptcy reported. NPC, the nation’s largest franchisee of Pizza Hut and Wendy’s restaurants, said yesterday that Flynn will acquire all of its more than 925 Pizza Hut locations, along with roughly half of its nearly 400 Wendy’s sites and substantially all of its shared-service assets. Wendy’s International, meanwhile, will acquire over 190 of NPC’s Wendy’s locations and assign the right to buy the restaurants to five current franchisees, court filings show. Flynn would take over NPC’s Pizza Hut restaurants as well as Wendy’s units in Salt Lake City and parts of Maryland for roughly $553 million. Wendy’s International, along with certain of its franchisees, agreed to acquire Wendy’s restaurants in Pennsylvania; Kansas City, Mo.; Greensboro, N.C.; and Raleigh, N.C., for roughly $248 million, court filings show.

Vegan celebrity chef Chloe Coscarelli is exploring a bid for bankrupt plant-based restaurant brand By Chloe, the namesake fast-casual chain she co-founded years ago but left behind after a dispute with a shareholder, WSJ Pro Bankruptcy reported. Bankruptcy Judge Brendan Shannon during a hearing yesterday said that he would approve the bidding process of the chain’s parent company, BC Hospitality Group Inc. The company, part-owned by investment firm Bain Capital LP, pushed back by about two weeks its initial timeline to sell its assets out of bankruptcy. It is now eyeing an auction in early March, if necessary, with court approval of the sale expected shortly after. It had originally contemplated an auction in mid-February. About 15 potential buyers “have expressed interest in learning more about the company to evaluate potentially submitting a bid,” according to a declaration filed by restructuring adviser Michael Mortell. “We expect our clients will have at least until Feb. 25 to make a bid to purchase their company, either through an asset sale or through a planned process,” said Scott F. Gautier, a lawyer representing Chef Chloe LLC and Ms. Coscarelli, who gained fame after winning the first prize on the Food Network series “Cupcake Wars” in 2010.

Loves Furniture Inc., the upstart furniture retailer that acquired more than two dozen Art Van stores out of bankruptcy only eight months ago, filed for chapter 11 protection in Detroit on Wednesday, Crain's Detroit Business reported. The reorganization comes only weeks after the Warren, Mich.-based retailer began liquidating 10 stores across Michigan. The retailer has been plagued with financial troubles since acquiring assets and leases of 27 total Art Van stores out of U.S. Bankruptcy Court in Delaware for $6.9 million in May last year. The liquidation effort led by CEO Mack Peters, who was hired last month, quickly failed as debt continued to mount and poor performance dragged down the brand. Peters told Crain's in December that Loves was struggling with supply chain issues and couldn't continue servicing the company's stable of stores. Loves already turned over all five of its Pennsylvania stores to new owners as well as its Westland and Ann Arbor stores to competitors. The closure of more stores was then being discussed, Peters said.