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The federal government has only just begun sending out a second round of stimulus payments, and many people are already waiting a little longer than expected for their money, the New York Times reported. Many payments have been sent to inactive or temporary accounts that taxpayers don’t have access to. It’s not clear how many people are affected, but the tax preparation company Jackson Hewitt said the Internal Revenue Service had sent payments to more than 13 million bank accounts that were no longer open or valid. “Because of the speed at which the law required the I.R.S. to issue the second round of Economic Impact Payments, some payments may have been sent to an account that may be closed or no longer active,” the agency said in a statement yesterday. Companies like TurboTax, H&R Block and Jackson Hewitt sometimes set up temporary accounts for clients when they prepare returns. For example, clients who opts to have preparation fees deducted from their refund may be issued one of these accounts, allowing the tax firm to take its share and then pass on the rest. After that, the accounts are generally inactive — but may still be linked to the taxpayers in IRS records. Payments that are sent to inactive accounts must be returned to the Treasury. People who don’t receive their payments promptly should claim the so-called Recovery Rebate Credit on their 2020 tax return, the I.R.S. said. (The credit can be found on line 30 of the 2020 Form 1040 or 1040-SR.)

The owner of New York Sports Clubs and Lucille Roberts is seeking fresh equity capital to stave off a cash crunch less than two months after buying the gym chains out of bankruptcy, WSJ Pro Bankruptcy reported. The investor-backed acquisition vehicle that bought the fitness chains is soliciting investors for a $2 million equity raise to improve liquidity and fund working capital needs, giving a Wednesday deadline for potential participants to indicate interest. The chains were sold out of bankruptcy in November to Peak Credit LLC, an affiliate of New York-based investment banking firm Lepercq de Neuflize & Co., as well as a number of lenders to the chains’ former owner, Town Sports International LLC. Following Town Sports’ September bankruptcy filing, private-equity firm Tacit Capital LLC had proposed serving as the stalking-horse bidder to acquire the company’s assets. Tacit backed out when it failed to come up with the $47.5 million it had pledged to post to fund operations once the bankruptcy sale closed, according to court records. Peak stepped in for Tacit with a $5 million funding commitment to capitalize an acquisition vehicle called New TSI Holdings Inc. that would own and operate the chains, according to court documents.

Even before COVID-19, the World Bank had lowered its projections for global growth in the 10 years that began in 2020. The pandemic is exacerbating that trend, raising the prospect of a “lost decade” ahead, the World Bank said yesterday, as it also cut its forecasts for the coming year, the Wall Street Journal reported. The bank’s semiannual Global Economic Prospects report attributes the long-term downgrade to lower trade and investment caused by uncertainty over the pandemic, along with disruptions in education that will hamper gains in labor productivity. “If history is any guide, unless there is substantial reform, we think the global economy is headed for a decade of disappointing growth outcomes,” Ayhan Kose, the bank’s acting vice president for equitable growth and financial institutions, said in an interview. Before the pandemic, the bank projected that potential global growth between 2020 and 2029 would slow to a yearly average of 2.1%, from 2.5% in the previous decade, as a result of aging populations and lower productivity growth. On Tuesday the bank lowered its projection to 1.9%. Potential output assumes the world economy is operating at full employment and capacity.

Department store operator Macy’s Inc. said yesterday that it would close about 45 stores this year as part of its three-year plan to lower store count in order to focus on its more productive outlets, Reuters reported. Even before the lockdowns in the U.S. last year, Macy’s had announced the plan to close 125 of its least productive stores to tackle plummeting mall traffic. It had closed about 30 stores in 2020. “Macy’s is committed to rightsizing our store fleet by concentrating our existing retail locations in desirable and well-trafficked A and B malls,” Macy’s said in an emailed statement on Tuesday. The COVID-19 outbreak has worsened the plight of certain mall-based chains, forcing them to shutter stores and double down on their online business, while few chains are looking to open smaller stores in off-mall locations. Macy’s, which operates over 750 shops, including Bluemercury, Bloomingdale’s and its eponymous stores, said it would post a list of stores expected to be closed this year on its website today.

The owner of seven top-notch hotels in and near the Bay Area in California has warned regulators that it faces a severe cash squeeze and possible bankruptcy — but also says it hopes a financing package provided by a major investor could help ward off its money struggles, the San Jose Mercury News reported. The scramble by Ashford Hospitality to land financing in the wake of its warning that it was facing potential bankruptcy are the latest indicators of the coronavirus-linked financial and economic roller coaster that confronts the lodging and travel sectors. Texas-based Ashford Hospitality Trust, which owns hotels in 27 states including California, warned in a Dec. 22 filing with the Securities and Exchange Commission that it is suffering liquidity problems that are serious enough to shove the company into a chapter 11 bankruptcy filing. However, in a Dec. 28 filing with the SEC, Ashford Hospitality stated that it had secured a financing commitment of at least $200 million from Oaktree Capital Management that could dramatically ease the lodging company’s financial squeeze. Texas-based Ashford Hospitality’s lodging properties include six hotels in the Bay Area and one hotel in the Monterey Bay area, according to the company’s website. The hotel owner said that it believes it has enough cash to fund its operations “into the early part of fiscal year 2021,” Ashford Hospitality stated in a recent SEC filing Ashford’s fiscal year is identical to the calendar year.

In the depths of the financial panic from COVID-19 last year, the Federal Reserve offered to lend to a wide swath of businesses — something it had never done before. Yet it struggled to find takers, the Wall Street Journal reported. The Main Street Lending Program aimed to help pandemic-hit businesses that were too small to borrow in the bond market but might need more help than a small-business loan from the popular Paycheck Protection Program. “There was a program here that looked nice on paper, but in practicality, it has not worked,” said Mike Cazaz, chief executive of Werner Aero Services, a New Jersey supplier of aircraft engines and parts that couldn’t get a loan under the program. Washington, D.C., was happy to rely on the Fed because it had the chops to get a program for medium-size businesses up and running fast. Its apolitical reputation reduced concern about loans being steered to big donors. The Treasury Department became a Fed partner to absorb any loan losses. But the experience revealed the limitations of running a relief program through the Fed and exposed gaps in the government’s ability to deliver aid to companies that can’t raise money on Wall Street. For months, many banks weren’t interested in participating. Demand picked up only in recent weeks after word came that the program would be ending. “There is a cost if, whenever we have [financial panics], we do programs that only help large institutions, because in the long run that makes it much riskier to be a small or medium-size firm,” said Eric Rosengren, president of the Federal Reserve Bank of Boston, which has administered the Main Street program. Many such businesses could fall through the cracks, he said, accelerating a long-running consolidation in which larger companies with access to low-cost credit increase market share. Read more. (Subscription required.) 

In related news, thousands of minority-owned small businesses were at the end of the line in the government’s coronavirus relief program as many struggled to find banks that would accept their applications or were disadvantaged by the terms of the program, the Associated Press reported. Data from the Paycheck Protection Program released Dec. 1 and analyzed by the Associated Press show that many minority owners desperate for a relief loan didn’t receive one until the PPP’s last few weeks while many more white business owners were able to get loans earlier in the program. The program, which began April 3 and ended Aug. 8 and handed out 5.2 million loans worth $525 billion, helped many businesses stay on their feet during a period when government measures to control the coronavirus forced many to shut down or operate at a diminished capacity. But it struggled to meet its promise of aiding communities that historically haven’t gotten the help they needed. Read more. 

House Democrats vowed yesterday to renew efforts on economic assistance — including state and local aid and potentially $2,000 checks to individuals — in the 117th Congress that is now getting underway, the Washington Post reported. House Democratic Caucus Chairman Hakeem Jeffries (D-N.Y.) said that the $2,000 checks amount to “unfinished business that should be continued as part of our effort to provide additional relief to the American people.” The House last week passed legislation providing for $2,000 relief checks, but Senate Majority Leader Mitch McConnell (R-Ky.) rejected the measure even though President Trump was demanding it. Congress earlier approved a $900 billion coronavirus relief bill that included $600 checks, legislation that Trump ultimately signed even while criticizing the size of the checks as “measly." Democrats anticipate writing a new relief bill once President-elect Joe Biden is sworn in Jan. 20. Its contours are uncertain, however, and the path forward will depend on the outcome of two Senate runoffs in Georgia on Tuesday that will determine which party controls the Senate.

With his presidential inauguration just weeks away, Joseph R. Biden Jr. is confronting an economic crisis that is utterly unparalleled and yet eerily familiar. Millions of Americans are out of work, small businesses are struggling to survive, hunger is rampant, and people across the country fear getting kicked out of their homes, the New York Times reported. The moment was similarly perilous exactly 12 years ago, when Biden was the vice president-elect and preparing to take office. “I remember the utter terror,” said Cecilia Rouse, who was an economic adviser in the Obama White House and has been chosen to lead Mr. Biden’s Council of Economic Advisers. The $900 billion pandemic relief plan that moderate lawmakers powered through Congress last month provides the incoming administration with some breathing room. This second tier of aid will deliver $600 stimulus checks, assist small businesses and extend federal unemployment benefits through mid-March. But as Biden has made clear, it is simply a “down payment” — a brief bridge to get through a dark winter and not nearly enough to restore the economy’s health.

Tuesday Morning emerged from chapter 11 protection, it announced yesterday, with financial backing from J.P. Morgan, Wells Fargo, and Bank of America, the Dallas Business Journal reported. The Dallas-based off-price home goods retailer filed for bankruptcy in May due to challenges from the COVID-19 pandemic. The ascent from chapter 11 is possible with a $110 million asset-backed lending facility provided by J.P. Morgan, Wells Fargo, and Bank of America, according to a release. “We have emerged with a streamlined operating model, and are well-positioned to execute on our strategy,” said CEO Steve Becker in a prepared statement. The release said that the additional liquidity will support Tuesday Morning’s ongoing operations and strategic initiatives. At the time it filed for bankruptcy, it had 687 stores that it planned to close in phases to help deal with the fallout from the lockdown. It’s emerging with 490 of its best-performing stores.