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The $900 billion U.S. stimulus package doesn’t allocate direct funding for restaurants and bars, another blow to two of the hardest-hit parts of the U.S. economy, Bloomberg News reported yesterday. The wide-ranging spending bill does allow small businesses to take out loans. It also directly funds several beleaguered industries, but doesn’t include restaurants and bars. With more states restricting indoor activities, these establishments are already facing a bleak future. “Independent restaurants and bars will continue to close without additional relief this winter, leaving millions more out of work,” the Independent Restaurant Coalition said in a statement. Those industries have been decimated by the pandemic that continues to rage across America. Bankruptcies and closures are surging. And while revenue has recovered somewhat from its low in April, sit-down eateries are still struggling. These declines have also hurt suppliers, including beer and spirits providers. Democrats in the House passed the Restaurants Act earlier this year that would have provided $120 billion in direct funding, but the Republican-controlled Senate declined to take up the legislation. Meanwhile, the stimulus set aside about $15 billion each for the airline and entertainment industries. Despite the lack of a bailout, the stimulus proved to be “a hard fought victory” that provides the sector an “element of hope” entering the new year, according to Sean Kennedy, executive vice president of public affairs for the National Restaurant Association. “Is this a long-term solution? No,” Kennedy said. “We’re just looking to survive the next three months.” Restaurants and bars, along with other small businesses, can apply for aid from the Paycheck Protection Program, the vehicle created by the first stimulus earlier this year. The PPP, which received $284 billion in additional funds, lets firms borrow 2.5 times monthly payroll costs, with restaurants and bars allowed to receive 3.5 times. Another critical part of the aid package, according to Kennedy, is that business expenses, such as rent, that are allowed to be deducted from federal taxes, can be paid with PPP funds. This was not the case in the first round of PPP, he said.

President-elect Joe Biden warned the “darkest days” of the coronavirus pandemic were still to come and called on Congress to be ready early next year to produce another stimulus package, even though the most recent one took months to complete, Bloomberg News reported. “Our darkest days in the battle against COVID are ahead of us, not behind us,” he said at a year-end news conference in Wilmington, Delaware. Biden said that the country needs to support state and local governments, which have seen resources plunge during the pandemic, and also offer other economic stimulus. When pressed for what he wanted in the next round of stimulus, Biden refused to specify a dollar amount or predict the outcome. Biden said he expected Congress to provide enough money to vaccinate 300 million Americans, provide unemployment insurance, put in place eviction moratoriums, fund protective equipment for front-line health care workers and provide more direct payments.

The Department of Housing and Urban Development has extended a moratorium on evictions and foreclosures on home mortgages it insures against default, protecting many first-time home buyers, the New York Times reported. The moratorium will now run through Feb. 28. It had been set to expire at the end of the month. The foreclosure moratorium applies to mortgages backed by the Federal Home Administration, a division of the federal housing department. In recent years, F.H.A. guaranteed mortgages have become a major way for first-time buyers to acquire homes. The biggest underwriters of F.H.A. mortgages have been so-called nonbank lenders that are not affiliated with a major bank. HUD is also similarly extending the deadline for cash-strapped homeowners to seek a reprieve from making full mortgage payments for up to six months.

Punch Bowl Social filed for chapter 11 protection on Monday after the coronavirus pandemic devastated its business, CNBC.com reported. As recently as February, the once-buzzy “eatertainment” chain looked to be the future of the restaurant industry, offering arcade games and karaoke along with food and drinks. Cracker Barrel invested $140 million in a stake of the company last year, and Punch Bowl had grown to 20 locations by the time lockdowns went into place in March. The crisis evaporated its customer base, and Cracker Barrel opted to shore up its own liquidity in March instead of helping Punch Bowl stay afloat. CEO Robert Thompson, who founded Punch Bowl in 2012, exited the company in the midst of the pandemic. Its primary lender CrowdOut Capital became a partial owner and hired a new chief executive: John Haywood, who has earned a reputation as a turnaround specialist. Punch Bowl has liabilities of between $10 million to $50 million, according to bankruptcy filings. It owes more than $10 million for a Payment Protection Program loan to JPMorgan Chase, its top creditor. The majority of its other creditors are leaseholders from its locations scattered across the country.

States and major cities across the country have imposed the most extensive restrictions on business and social gatherings since widespread lockdowns during the spring, in hopes of preventing a further surge in COVID-19 cases over the winter holidays, WSJ Pro Bankruptcy reported. Nearly 85 million Americans are expected to travel from Dec. 23 through Jan. 3, off at least 29% from last year, according to an estimate by AAA. In states across the country, small businesses and restaurants are being hit with de facto lockdowns because of occupancy limits or restrictions on dining. At the same time, big-box retailers have been permitted to stay open, in part because their large stores allow for social distancing, prompting resentment from small-business owners. In the spring, all but a handful of states issued stay-at-home orders that ground nonessential economic activity to a halt. At the time, states were short of ventilators, testing capacity and personal protective equipment for health-care workers, and lacked treatments for the new virus. Those broad orders slowed the rate of infection and bought time for hospitals to catch up. Now, as case numbers surge, most states are clamping down on activities that help the virus spread while trying to avoid a complete shutdown of the economy. Even as Pfizer Inc. and Moderna Inc. deliver the first doses of the coronavirus vaccine, officials are pleading with a weary — and sometimes defiant — public to avoid the kinds of gatherings and travel that helped drive new cases to record levels nationally after Thanksgiving.

Congress last night overwhelmingly approved a $900 billion stimulus package that would send billions of dollars to American households and businesses grappling with the economic and health toll of the pandemic, the New York Times reported. Treasury Secretary Steven Mnuchin said that hundreds of dollars in direct payments could begin reaching individual Americans as early as next week. The long-sought relief package was part of a $2.3 trillion catchall package that included $1.4 trillion to fund the government through the end of the fiscal year on Sept. 30. It included the extension of routine tax provisions, a tax deduction for corporate meals, the establishment of two Smithsonian museums, a ban on surprise medical bills and a restoration of Pell grants for incarcerated students, among hundreds of other measures. Though the $900 billion stimulus package is half the size of the $2.2 trillion stimulus law passed in March that provided the core of its legislative provisions, it remains one of the largest relief packages in modern American history. It will revive a supplemental unemployment benefit for millions of unemployed Americans at $300 a week for 11 weeks and provide for another round of $600 direct payments to adults and children. The legislative text is likely to be one of the longest ever, and it became available only a few hours before both chambers approved the bill. In the Senate, the bill passed 92 to 6, with Senators Marsha Blackburn of Tennessee, Ted Cruz of Texas, Ron Johnson of Wisconsin, Mike Lee of Utah, Rand Paul of Kentucky and Rick Scott of Florida, all Republicans, voting no. It will now go to President Trump for his signature. But with as many as 12 million Americans set to lose access to expanded and extended unemployment benefits days after Christmas, passage was not in doubt. A number of other pandemic relief provisions are set to expire at the end of the year, and lawmakers in both chambers agreed that the approval of the $900 billion relief package was shamefully overdue.

Vitality Health Plan of California, which offers Medicare Advantage plans, filed for chapter 11 protection on Dec. 18, Becker's Hospital Review reported. The company entered bankruptcy after California hospitals canceled their contracts with the insurer earlier this year over its deteriorating financial situation. Vitality is required to maintain a few million dollars in financial reserves, but it had negative working capital as of this summer, according to the San Jose Mercury News, which cited documents from the California Department of Managed Health Care. The company entered bankruptcy with more than $1 million in estimated assets and more than $10 million in estimated liabilities, according to the bankruptcy petition. The creditor with the largest unsecured claim against the health plan is Regional Medical Center in San Jose, Calif., according to bankruptcy documents.

A wave of attempted fraud is hitting state unemployment benefits programs after they struggled to process record-high claims from layoffs during the economic turbulence triggered by the coronavirus pandemic, the Wall Street Journal reported. States across the country — including California, Louisiana, Illinois, Maryland and others — have collectively received millions of unemployment insurance requests that officials believe to be tied to fraud, with losses likely in the billions of dollars. More than $500 billion in regular and pandemic-related unemployment aid has been distributed so far in the pandemic, according to U.S. Treasury Department data. And more is coming, including a new round of enhanced benefits worth $300 a week included in a pandemic stimulus package passed by Congress. The nation’s unemployment insurance systems are run through a patchwork of state-run programs where fraud has “dramatically increased during the pandemic,” a U.S. Labor Department spokeswoman said. The department, which administers federal components of aid programs in addition to compiling data on state benefits, said thieves have targeted temporary pandemic-related programs extending unemployment aid to millions of workers. To better understand the scope of fraud, it is working with states to track denials where identities couldn’t be verified, the agency spokeswoman said.

Rubio’s Restaurants, a presence in San Diego for nearly four decades, cleared a major hurdle yesterday in its quest to emerge from bankruptcy by the end of this month, the San Diego Union-Tribune reported. A pre-negotiated plan for restructuring the company’s substantial debt of more than $72 million was approved by Bankruptcy Judge Mary F. Walrath, who commended the company, its lender and the committee representing unsecured creditors for working out their differences ahead of the hearing. Rubio’s had filed for chapter 11 protection only two months ago. As part of the plan, Golub Capital, Rubio’s long-time lender, has agreed to provide $52 million in so-called “exit” financing, of which $8 million was new funding to keep the company afloat during bankruptcy period and $7 million is new financing once the company emerges from bankruptcy. Owner Mill Road Capital has agreed to invest $6 million back into the company and in so doing will write off $2 million in liabilities. Golub, which is converting $18 million of its debt into equity and waiving remaining claims, will now hold an equity stake in Rubio’s. Company executives were unwilling to state who will have majority ownership in the chain. The $72 million in outstanding debt does not include a $10 million loan from the Paycheck Protection Program that, presumably, will be forgiven.