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Money owed to aircraft lessors and some creditors of South African Airways (SAA) is not covered by a 10.5 billion rand ($665 million) government bailout, SAA’s administrators said, Reuters reported. South Africa’s government allocated the latest cash injection for SAA in last month’s mid-term budget, but says it will not put further money into the airline. SAA’s administrators told Reuters on Thursday that 1.7 billion rand owed to lessors and 600 million rand that it owes to creditors from before the airline went into administration nearly a year ago would not be covered. That could complicate government talks with prospective investors in SAA, which has not made a profit since 2011. They said that the additional debts are “only payable from next July and will be paid over a three-year period,” so the bailout money only covers “initial commitments.” The administrators forecast in June that SAA would lose more than 6 billion rand over the next three years. Some analysts expect greater losses given the damaging impact on air travel of the COVID-19 pandemic. Click here.

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. 

Congress should pass a new economic-relief package this year, Senate Majority Leader Mitch McConnell said on Wednesday, as prospects for Democrats’ multitrillion-dollar stimulus bill faded along with their chances for full control of the government, the Wall Street Journal reported. Lawmakers have been deadlocked for months over further aid, with Republicans insisting on liability protections for businesses and Democrats seeking aid for state and local governments. With the outcome of Tuesday’s elections still in doubt, McConnell (R-Ky.) signaled that he would try to move this year, with President Trump assured of still being in office for at least that time. “We need another rescue package,” McConnell said. “Hopefully the partisan passions that prevented us from doing another rescue package will subside with the election. We need to do it, and I think we need to do it before the end of the year. McConnell said he would support including more funding for schools, hospitals and a popular small-business loan program, but not a more sweeping proposal that Democrats have sought. He also noted that Congress will have to move to keep the government running before its current funding expires on Dec. 11. McConnell said that he and House Speaker Nancy Pelosi (D-Calif.) agreed to pass full-year spending bills in December.

Pet-supply retailer Pet Valu Inc., buckling under the pressure of restrictions related to the coronavirus pandemic, plans to close its nearly 360 stores and warehouses in the U.S., WSJ Pro Bankruptcy reported. The specialty retailer of premium pet food and supplies said Wednesday it expects to wind down all of its 358 stores and warehouses in the Northeastern and Midwestern U.S., as well as its corporate office in Wayne, Pa. “After a thorough review of all available alternatives, we made the difficult but necessary decision to commence this orderly wind down,” said Jamie Gould, Pet Valu’s recently appointed chief restructuring officer. Pet Valu, owned by consumer-focused private-equity firm Roark Capital Group, said that its stores have been hurt by the pandemic, which has prompted a raft of retailers to file for bankruptcy and close stores. The U.S. company licenses its name and contracts for certain services from Pet Valu Canada Inc., a separate entity that isn’t part of the wind-down. The Ontario-based company will continue to operate its roughly 600 stores, franchise locations and e-commerce site in Canada. The U.S. chain, which has been operating for more than 25 years, said it expects to begin store-closing sales in the coming days. In the meantime, all Pet Valu stores in the U.S. remain open. The company said it has stopped taking online orders on its Pet Valu U.S. e-commerce site.

U.S. private payrolls increased less than expected in October and activity in the services industry cooled, providing early signs of a slowdown in economic growth as fiscal stimulus diminishes and new COVID-19 infections surge across the country, Reuters reported. The recovery from the coronavirus pandemic could also be impacted over the next few months by political uncertainty following Tuesday’s cliffhanger presidential election, which economists warned could cause businesses to be more cautious about spending decisions. The election hung in the balance on yesterday, with a handful of close-fought states set to decide the outcome in the coming hours or days. “This is not a good outcome for the economy since the headwinds from rising Covid cases, troubled state and local government finances and falling incomes as unemployment benefits expire, are growing in strength,” said James Knightley, chief international economist at ING in New York. Private payrolls increased by 365,000 jobs last month after rising 753,000 in September, the ADP National Employment Report showed on Wednesday. Economists polled by Reuters had forecast private payrolls would advance by 650,000 in October. Job gains last month were broad, though they were concentrated in industries directly impacted by the coronavirus crisis, including the leisure and hospitality sector. The resurgence in COVID-19 cases across the country could lead to renewed business restrictions to slow the spread of the respiratory illness as winter approaches.

Shogo Takemoto’s family has tilled the rice fields of eastern Japan for more than 200 years. They stash their savings in an agricultural cooperative and borrow from it to help finance the farm’s day-to-day operations. But with interest rates near zero, the return on the loans is too little to keep the cooperative going. So it deposits Takemoto’s savings with Japan’s bank for farmers and fishermen, which sends the money overseas to earn a better yield. That’s how Takemoto became an indirect investor in car rental company Hertz Global Holdings Inc. before it declared bankruptcy in May, the Wall Street Journal reported. Among the owners of Hertz’s debt was Norinchukin Bank, which owned bonds backed by pieces of loans to struggling companies like Hertz. Later that month, the bank — founded nearly 100 years ago to serve the people who feed Japan — disclosed a staggering $3.7 billion unrealized loss on such bonds and said it would pause further investments. The loss, which has mostly been recouped as markets rebounded, was shocking for its size, and also because Norinchukin invested exclusively in triple-A rated bonds, which are supposed to be among the safest securities anywhere. The stumble disrupted one of Wall Street’s most lucrative trade routes — a steady flow of capital from yield-starved investors in Asia who turned to the U.S. to avoid the sting of zero interest rates at home. In doing so, they channeled their customers’ savings into a boom for loans to some of America’s riskiest corporate borrowers.

Westminster Management, an apartment company owned in part by White House senior adviser Jared Kushner, has submitted hundreds of eviction filings in court against tenants with past due rent during the pandemic, according to interviews with more than a dozen tenants and a review of hundreds of the company’s filings, the Washington Post reported. A state eviction moratorium currently bars Maryland courts from removing tenants from their homes, and a federal moratorium offers renters additional protection. But like other landlords around the country, Westminster has been sending letters to tenants threatening legal fees and then filing eviction notices in court ― a first legal step toward removing tenants. Those notices are now piling up in local courthouses as part of a national backlog of tens of thousands of cases that experts warn could lead to a surge in displaced renters across the country as eviction bans expire and courts resume processing cases. Many of the Westminster tenants facing eviction live on low or middle incomes in modest apartments in the Baltimore area, according to tenants. Some of them told the Washington Post they fell behind on rent after losing jobs or wages due to the pandemic. For the moment, Maryland courts cannot order people removed from their homes. The state’s moratorium was renewed Oct. 29, preventing cases from proceeding. A Centers for Disease Control and Prevention ban through the end of this year allows tenants in many cases to file paperwork to halt the process. Westminster, a unit of the Kushner Cos., issued a statement from Kushner Cos. general counsel Christopher W. Smith saying the company was fully compliant with state and federal eviction bans, including ones approved by President Trump through the Cares Act and the CDC.

Mexican airline Aeromexico has requested permission from U.S. bankruptcy court to dismiss 1,830 employees in a cost-saving measure to weather the economic shocks of the coronavirus crisis, according to court filings filed yesterday, Reuters reported. The proposed layoffs, of 855 unionized workers and another 975 who do not belong to a union, would save the company $44 million on a recurring annual basis, Aeromexico said. Although the cuts will first cost the company $31 million in severance benefits, Aeromexico said the expected outcome “significantly outweighs the program’s one-time cost.” Aeromexico sought approval from the court to carry out the layoffs by the end of the month, according to the court filings. The company did not specify which positions would be eliminated. Aeromexico in June began a chapter 11 restructuring process in the U.S., becoming the third Latin American airline to file for bankruptcy protection, and has since received approval for up to $1 billion in financing. 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. 

Shopping mall owners CBL & Associates Properties Inc. and Pennsylvania Real Estate Investment Trust are facing determined opponents to the companies’ respective bankruptcy restructuring plans, WSJ Pro Bankruptcy reported. CBL, one of the largest mall owners in the country, filed for bankruptcy on Sunday hoping to convert bondholders to owners but has a fight on its hands with its bank lender, Wells Fargo Bank NA, which isn’t on board, CBL lawyer Ray Schrock said at a court hearing on Monday. Likewise, PREIT—which also filed for bankruptcy Sunday—reached agreement on a restructuring with nearly all major creditors, save for one opponent that said the company’s proposal does virtually nothing to improve the balance sheet and is destined to end in another bankruptcy. “This company filed for bankruptcy with a deal with its bondholders and a fight with its bank lenders,” said Michael Stamer, a lawyer for the CBL bondholders that agreed to convert some debt to equity, during Monday’s court hearing. After CBL’s bondholders sent a restructuring proposal to Wells Fargo, the bank declared a default against the company and proceeded to step in to collect rent itself at some of the company’s properties, according to CBL’s court filings.