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The Treasury Department yesterday dialed back its estimates for government borrowing through the end of the year as negotiations over another large fiscal stimulus bill remain stalled, the Wall Street Journal reported. The Treasury estimated the government would borrow $617 billion from October through December, down from its $1.216 trillion estimate in early August. Senior Treasury officials said they continue to assume that Congress eventually will pass another economic-relief package with about $1 trillion in new spending — the same assumption they made in August — but that much of that borrowing would likely be pushed back to early 2021. Officials estimated net marketable borrowing from January through March would total $1.127 trillion. Meanwhile, borrowing from July through September was much less than expected — $454 billion, compared with $947 billion projected in August.

Mall owner CBL & Associates Properties Inc. filed for court protection from creditors, following some of its biggest tenants into bankruptcy after the pandemic kept consumers at home, forcing many retailers already weakened by e-commerce to quit paying rent, Bloomberg News reported. The filing in the Southern District Court of Texas will give the company a chance to keep operating while reorganizing its finances and business. It listed estimated assets at about $1 billion to $10 billion, and estimated liabilities at around the same amount. Some of CBL’s biggest renters, including J.C. Penney Co. and Ascena Retail Group Inc. have already filed for bankruptcy with plans to close stores. Analysts have long predicted a shakeout in malls and strip shopping centers serving less affluent areas, which dominate CBL’s roster. CBL previously warned investors it was in trouble because tenants weren’t paying their rent. As of mid-August, the Chattanooga, Tennessee-based company managed 108 properties in 26 states. Read more.

Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store. 

PREIT, the troubled owner of malls throughout the region including Center City’s Fashion District Philadelphia, filed a pre-packaged Chapter 11 bankruptcy yesterday aimed at unlocking $150 million in new borrowing, the Philadelphia Inquirer reported. PREIT, whose initials stand for Pennsylvania Real Estate Investment Trust, said in a news release that it will continue operations without interruption while it obtains necessary approvals for the plan. The Chapter 11 petition comes about two weeks after the company first outlined the restructuring plan, saying it aimed to avoid a bankruptcy filing by persuading all of its lenders to back the proposal. It ultimately received support from 95 percent of its creditors, it said in the release. “With the overwhelming support of our lenders, we look forward to quickly emerging from this process as a financially stronger company with the resources and support to continue creating diverse, multiuse ecosystems throughout our portfolio,” PREIT chief executive Joseph F. Coradino said. Under the deal, PREIT would put up properties that it owns free and clear as collateral for its $919 million in existing unsecured debt and the $150 million in new borrowing. That would mean PREIT’s lenders could foreclose on those properties if it defaulted. PREIT is the biggest mall owner in Philadelphia and its surrounding counties, with 4.7 million square feet of space under management in the region, according to market tracker CoStar Group.

Friendly’s Restaurants LLC, an iconic chain on the East Coast of the U.S. known for its sundaes, became the latest dining institution to go bankrupt amid the pandemic, Bloomberg News reported. The company filed for chapter 11 protection in Delaware yesterday, according to a filing. It listed estimated liabilities of $50 million to $100 million, and estimated assets of $1 million to $10 million. FIC Restaurants Inc., which operates the Friendly’s brand, will sell substantially all of its assets to Amici Partners Group, according to a press release. Nearly all of Friendly’s 130 corporate-owned and franchised restaurant locations will likely remain open subject to pandemic limitations, it said. This isn’t the brand’s first brush with bankruptcy. In 2011, Friendly Ice Cream Corp. and its subsidiaries, the operator of Friendly’s restaurants and a nationwide distributor of ice cream products, had entered chapter 11. 

The Federal Reserve on Friday widened the terms of its Main Street lending program for small businesses struggling during the coronavirus crisis, as the chances of another round of stimulus help for businesses appears increasingly unlikely in the next few weeks, the Washington Post reported. On Friday, the central bank lowered the threshold for loans that businesses can apply for from $250,000 to $100,000. The Fed also tweaked rules about the degree to which prior loan help from the federal government can be counted in a company’s application, with an eye toward trying to make the Main Street lending program more accessible to small and midsized businesses. The changes come as scores of American businesses are waiting for lawmakers to cut another stimulus deal, which could include an additional round of grants from the Paycheck Protection Program. Months of fraught negotiations between the White House and House Democrats have prompted some to ask what more the Federal Reserve could do to expand the reach of its emergency programs — particularly the Main Street lending facility. The Main Street lending program, which has the capacity to issue up to $600 billion in loans, has so far made almost 400 loans totaling $3.7 billion. The program has been widely criticized for having onerous loan terms, and there are ongoing debates about how much risk the program should take on given that losses are ultimately covered by taxpayer dollars. But even now, hundreds of billions of dollars set aside by lawmakers to cover losses from the Fed’s emergency facilities are going untapped.

Senate Majority Leader Mitch McConnell (R-Ky.) said that he expects Congress to move another coronavirus relief package “right at the beginning” of 2021, breaking from Speaker Nancy Pelosi (D-Calif.), who told reporters Thursday she wants to get a deal in the lame-duck session, The Hill reported. “We probably need to do another package, certainly more modest than the $3 trillion Nancy Pelosi package. I think that’ll be something we’ll need to do right at the beginning of the year,” McConnell said on Friday. “We could target it particularly at small businesses that are struggling, and hospitals that are now dealing with the second wave of the coronavirus, and of course the challenges for education, both K-12 and college,” the GOP leader said. McConnell offered a slower timeline than other lawmakers, who expect a deal to move after the election but before the end of the year or before the end of President Trump’s first term in January. Pelosi told reporters on Thursday of her expectation of reaching an agreement with the Trump administration in the lame-duck session.

Supply-chain bottlenecks caused by a crush of imports heading into U.S. seaports are pinching retailers’ efforts to stock up as consumers pick up their spending, the Wall Street Journal reported. Executives at Steve Madden Ltd. and Crocs Inc., merchants known for their footwear, both said in their third-quarter reports this week that they were hit by logistics delays in getting goods to distribution centers and stores heading into a critical selling season. “There was sort of a limited supply or a challenge getting containers and vessels, which slowed things down overseas,” Steve Madden Chief Executive and Chairman Ed Rosenfeld said on the company’s earnings call on Tuesday. He said operations at the company’s warehouses and those of its wholesale customers also “have been slower just due to some labor shortages and other disruption due to Covid.” Container shipping lines canceled hundreds of sailings this spring and summer as coronavirus-driven lockdowns sent national economies reeling and global trade withered. But demand snapped back strongly over the summer after businesses reopened and retailers rushed to restock inventories to get goods in place for a hoped-for rebound in the fall.

A new phase of the economic crisis is looming for the winner of Tuesday’s presidential election: potentially massive defaults by jobless Americans on consumer loans as the chances for more federal relief this year diminish, Politico reported. Both President Donald Trump and Democrat Joe Biden have called for robust new rescue packages for an economy still suffering from the pandemic, but Congress's inability to agree on key issues such as the size of unemployment benefits has kept the talks at an impasse for months. Now, millions of Americans are running out of money and will face hard choices between food purchases and payments on rent, credit cards and student loans. Generous unemployment benefits and stimulus checks given out earlier this year helped many people weather the early months of the crisis — with some even managing to increase their savings. But that support has faded and some of it will run dry by the end of the year. JPMorgan Chase Institute found that in August alone, typical unemployed families spent two-thirds of the additional rainy day funds that they’d built up over the previous four months. The “Lost Wages Assistance” aid program that Trump ordered after the expiration of more generous federal benefits — including a $600-a-week boost in jobless payments that ended on July 31 — helped bolster some families in September. But by early this month, much of that small pot of money had already been depleted. As a result, the largest U.S. banks warned investors this month that they expect credit card delinquencies to start mounting early next year. And with coronavirus cases spiking in places like the Midwest, pressure could increase on already struggling small businesses, pushing jobless numbers back up. In a Census Bureau survey this month, roughly a third of small businesses reported only having enough cash to get them through a month or less.