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Francesca's Holdings Corp. said yesterday in an 8-K filing that it will close 140 stores by Jan. 31, 2021, MarketWatch.com reported. The company expects to incur charges totaling $29 million $33 million through Oct. 31, 2020 related to the store closures. The number of stores the struggling women's retailer will close could change. Francesca's is considering options to improve its financial and liquidity situation, including restructuring debt and seeking lease concessions. The company said that a bankruptcy restructuring is also an option under consideration. "If the Company is unable to raise sufficient additional capital to continue to fund operations and pay its obligations, the Company will likely need to seek a restructuring under the protection of applicable bankruptcy laws," the company said. Francesca's stock sank more than 14 percent in trading yesterday, and has plunged 80 percent over the past year.

AirAsia Japan Co. has filed for bankruptcy with the Tokyo District Court after flagging last month it would cease operations in the country, as the coronavirus pandemic that’s wiped out travel globally took its toll, Bloomberg News reported. The arm of Malaysia’s AirAsia Group Bhd. then received a provisional administration order from the court today. “Given AirAsia Japan’s current financial position, we regret to inform that AirAsia Japan is currently unable to settle the outstanding refunds,” the company said. AirAsia, which reported its largest loss on record in the second quarter ended June 30, has been under immense pressure this year as Covid-19 roils the aviation industry. The low-cost airline has also stopped funding its Indian affiliate, leaving the future of AirAsia India Ltd. largely dependent on its majority shareholder, Indian conglomerate Tata Group. Long-haul budget arm, AirAsia X Bhd., isn’t faring much better, earlier this month submitting a new debt restructuring proposal to creditors. AirAsia Japan had already canceled all flights, including one between Nagoya and Taipei. Services operated to Japan by AirAsia’s other carriers in places like Thailand and the Philippines won’t be affected. International services to Japan from Malaysia, Thailand and the Philippines will resume as travel restrictions are eased and borders reopen, the airline said today. Read more. 

With the COVID-19 pandemic grinding international travel to a halt, experts on an online panel at ABI’s International Insolvency Forum set for Nov. 18-20 will provide their insights into distressed non-U.S. airlines filing for chapter 11 protection, and how their cases may differ from domestic carriers. Click here to register. 

Guitar Center Inc, the largest U.S. retailer of music instruments and equipment, has reached a restructuring agreement with key stakeholders that includes debt reduction by nearly $800 million, Reuters reported. The retailer signed the Restructuring Support Agreement (RSA) with its equity sponsor, a fund managed by private equity firm Ares Management LP, new investors Brigade Capital Management and a fund managed by Carlyle Group, as well as supermajorities of its noteholder groups. The agreement includes new equity investments of up to $165 million to recapitalize the company, the retailer said. The company expects to file voluntary petitions for reorganization following chapter 11 in the U.S. bankruptcy court to execute the prepackaged financial restructuring plan, according to the statement. Guitar Center, which owns nearly 300 stores across the country, said business operations will continue without any interruption under the deal. In 2017, the company said it was exploring ways to restructure its $1.3 billion debt burden as music lovers moved their shopping online. Guitar Center began in 1959 as a store selling home organs in Hollywood.

Gulfport Energy Corp. filed for bankruptcy, joining a slew of U.S. oil and gas companies that are collapsing after the pandemic deepened their struggle with low prices and too much debt, Bloomberg News reported. The Oklahoma City-based natural gas company filed a chapter 11 petition on Nov. 13 in U.S. Bankruptcy Court in Houston, declaring an estimated $2.5 billion in liabilities as of Sept. 30. In a statement Saturday, the company detailed a restructuring plan that it expects would cut debt by about $1.25 billion. “We expect to exit the chapter 11 process with leverage below two times and rapidly delever thereafter,” Chief Executive Officer David M. Wood said. “These improvements will significantly improve our ability to generate cash flow and value for our stakeholders going forward.” Gulfport, which produces gas from fields in Ohio and Oklahoma, was grappling to stay afloat even before COVID-19, after a series of acquisitions over the past decade left it too indebted to weather the energy rout. Following pressure from activist investor Firefly Value Partners to change its board, the company on Aug. 7 warned it might not be able to stay in business if it failed to refinance its debt. Many investors have shunned producers operating outside of the Permian Basin of West Texas and New Mexico, the most prolific U.S. oil patch, amid growing doubts about their ability to generate returns. BlackRock Inc., with 12.9 percent, is the biggest controller of voting shares in Gulfport. Read more. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition. 

The federal government is the primary lender for students who borrow money for college and graduate school, and the Education Department directly holds more than $1.4 trillion in student debt. President-elect Joseph R. Biden Jr.’s administration will have the ability to make changes that can directly affect millions of borrowers’ monthly bills, the New York Times reported. Nearly 22 million borrowers of federal student loans have had their monthly payments temporarily paused and interest waived through the end of the year because of the pandemic — a suspension of payments on debt totaling more than $900 billion — and they’re anxious to learn if the relief will continue into 2021. President Trump, through an executive action, already extended the so-called administrative forbearance through Dec. 31. (It had been scheduled to expire on Sept. 30 under an emergency legislative package.) But it’s unclear whether he plans to provide another extension before Mr. Biden takes office in late January. Congress may feel pressure to act before the year ends, policy experts said, and it could include an extension in a new stimulus package or other legislation. The higher-education platform Biden campaigned on was noticeably silent about a proposal that progressives say is ripe for executive action: outright cancellation of some student debt. The Higher Education Act of 1965, which created the federal student loan program, authorizes the education secretary to “compromise, waive or release” federal student loan debts. Some legal scholars and key lawmakers believe that language gives the president the power to use an executive order to direct the Education Department to broadly discharge debts for any or all student borrowers. Others disagree and believe such an action would face legal challenges. Senators Elizabeth Warren (D-Mass.) of Massachusetts and Chuck Schumer (D-N.Y.) have called for the next president to cancel up to $50,000 in debt per borrower. But Biden has never publicly endorsed the idea, and two people involved in his transition-planning discussions said that his views had not changed. Without legislative action by Congress — which is unlikely if Republicans retain control of the Senate — broad student debt cancellation seems improbable. Roughly 8.5 million federal loan borrowers are enrolled in income-driven repayment plans, which try to help struggling debtors by linking their monthly loan payment to how much they earn. There are four plans to choose from, but advocates say they’re not always affordable for the most vulnerable borrowers. Biden proposed a more generous option: Individuals earning $25,000 or less annually will not owe any payments on their undergraduate federal loans, nor will they accrue interest. All other borrowers will pay 5 percent of their discretionary income — what remains of their paychecks after accounting for basics like food and housing — over $25,000. That’s compared with the 10 to 15 percent of discretionary income required by plans now. (One plan demands 20 percent.) Under Biden’s plan, any remaining balance would be forgiven.

A bankruptcy judge designated the Flynn Restaurant Group LLC’s bid for Wendy’s and Pizza Hut franchisee NPC International Inc. as the best offer so far, setting an $816 million minimum price that rival bidders must beat, WSJ Pro Bankruptcy reported. The decision came after Wendy’s Co. voiced opposition, saying Flynn operates brands of sandwich competitors Arby’s and Panera Bread. Wendy’s has also formed a consortium with regional franchisees to launch its own offer for NPC’s Wendy’s restaurants. Both Wendy’s and Pizza Hut LLC have expressed concerns about NPC’s quick timeline for a sale, and have pushed for greater involvement in vetting any new owner of NPC’s restaurants. Last week NPC, the biggest franchisee of both Wendy’s and Pizza Hut restaurants, proposed tapping Flynn, the largest restaurant franchisee in the U.S., as the lead bidder, or stalking horse, to buy the company out of bankruptcy. At a hearing Friday in the U.S. Bankruptcy Court in Houston, Judge David Jones agreed to confer stalking-horse status on Flynn. He also signed off on breakup fees despite Wendy’s opposition. Wendy’s lawyer Sean O’Neal indicated the burger chain might ultimately not consent to Flynn’s planned takeover of NPC’s Wendy’s restaurants.

Tailored Brands Inc. said late Friday it expects to emerge from bankruptcy by the end of the month after the U.S. Bankruptcy Court for the Southern District of Texas approved its reorganization plan, MarketWatch.com reported. "We are extremely pleased to have reached this milestone," Chief Executive Dinesh Lathi said in a statement. The retailer behind Men's Wearhouse, Jos. A. Bank and other apparel said it had progressed steadily through its financial restructuring, invested in online and contactless order capabilities, and "further curated" its offerings. "These and other actions taken while in chapter 11 are the continuation of a strategic transformation that started well before COVID-19 and will position us to compete and succeed for the long term," Lathi said. Tailored filed for bankruptcy in August, part of a wave of pandemic-related bankruptcies that engulfed retailers in particular.

The Small Business Administration won a temporary stay of a federal judge’s ruling that required the agency to release detailed information on Paycheck Protection Program borrowers, including names and specific loan amounts, the Wall Street Journal reported. The temporary stay means the agency won’t have to release the information on PPP borrowers by Nov. 19, as originally ordered by U.S. District Judge James Boasberg in Washington, D.C. The initial ruling applied both to PPP loans and coronavirus-related loans under the SBA’s Economic Injury Disaster Loan program. The SBA, through its attorneys at the Justice Department, requested a full stay of the judge’s order, saying that it was considering an appeal. Judge Boasberg, in granting the temporary stay, said the SBA won’t have to release detailed information on borrowers until the agency’s request for a full stay is resolved. The judge gave plaintiffs in the case until Nov. 27 to respond to the merits of the SBA’s request.

According to Bloomberg Law dockets, through Oct. 31 alone, chapter 15 filings are up a whopping 68 percent over total 2019 filings. In contrast, total U.S. non-consumer bankruptcy filings through the close of third quarter of 2020 are slightly down — about 2.5 percent, compared to the same time period in 2019. A look at these raw numbers would lead us to believe that while our economy is rebounding, other countries are foundering miserably. But that is not necessarily the case, according to the commentary. As the pandemic and economic uncertainty linger, companies will continue to experience hardship, and some will file insolvency proceedings in their respective countries. A portion of those insolvent companies that have creditor exposure or assets in the U.S. and that are well-positioned enough to afford multiple simultaneous bankruptcies will undoubtedly file chapter 15 here. Although more than 40 countries have implemented some form of the UNCITRAL Model Law on Cross-Border Insolvency (the “Model Law”), the law upon which chapter 15 is based, only 20 countries are represented in the list of foreign proceeding venues for 2020. At the top of the list is Canada with 127 cases through October 31. Canadian debtors account for more than half of the chapter 15 cases filed in the United States. Even without the June filing of Cirque de Soleil and its more than 40 related entities, Canada would still lead the list, with more than 80 other cases originating in the country so far in 2020. Thanks to the Virgin Atlantic Airways bankruptcy and its 30-plus co-debtors, Australian debtors come in at No. 2. It is noteworthy that, were it not for the airline cases, Australia would barely have cracked the top 10, with only two cases.