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Rubio’s Restaurants Inc., the fast-casual chain known for its fish tacos, filed for chapter 11 protection yesterday with plans to cut debt and hand ownership to its lenders, Bloomberg News reported. The company, which operates 167 restaurants in Arizona, Nevada and California, defaulted on some of its debt in June after pandemic-related shutdowns slammed sales. But the chain was already grappling with cutthroat competition in the fast-casual segment, increased labor costs and a faltering expansion to new markets, according to court papers. Golub Capital, the company’s pre-bankruptcy secured lender, has agreed to provide an $8 million loan to help Rubio’s cover expenses during bankruptcy. Private equity firm Mill Road Capital, which owns Rubio’s, has agreed to provide an additional $6 million of equity financing as part of its bankruptcy plan, court papers show. Rubio’s employs more than 3,400 people across its restaurants and corporate offices. Between May and June, the Carlsbad, California-based company permanently closed 26 under-performing stores in California, Arizona, Colorado and Florida, according to court papers.

With the approval of the U.S. Bankruptcy Court Western District of New York, Eastern Niagara Hospital will sell its closed Newfane campus for $1 million, Buffalo Business First reported. Anne McCaffrey, hospital president, said that the approval allows the hospital to move forward with a purchase agreement with Costello Holdings, which is considering several options for the campus, including senior housing or assisted living. Costello Holdings, the Florida-based company that also owns the historic Bewley Building in Lockport and dozens of residential and multi-tenant apartment units in Niagara County, said that it would likely seek a partner to operate the campus. The campus was closed last year just before Eastern Niagara filed for chapter 11 protection. The campus includes the main hospital, a 63,106-square-foot facility with 74 rooms, and a secondary building. The site was renovated in 2018 as a home for the hospital's expanded inpatient addictions program. Eastern Niagara Hospital announced recently that it will also close its Lockport hospital as part of a collaboration with Catholic Health, which plans to open a $37 million hospital in the town. With revenue of $66 million in 2018, Eastern Niagara has finished the last four years in the red. It was one of the region's last remaining independent hospitals.

As pandemic-related restrictions tightened across parts of Illinois last week, small-business owners in this Chicagoland suburb girded themselves for another round of losses, the Wall Street Journal reported. On Friday, restaurants and bars in four counties closed once more to dine-in service under mitigation measures announced by Gov. J.B. Pritzker because of rising COVID-19 cases in every region of Illinois. In Chicago, Mayor Lori Lightfoot instituted a 10 p.m. nightly curfew for nonessential businesses and prohibited bars without a retail food license from serving customers indoors. Many businesses have endured multiple rounds of restrictions around the state, which are instituted whenever a region’s average COVID-19 positivity rate goes above an 8 percent threshold for three consecutive days. On Friday, Illinois health officials put half of the state’s 102 counties on a warning list because they triggered at least two state-set thresholds on indicators the state uses to determine where increased COVID-19 risk is occurring. On Friday, Illinois had 29,088 new COVID-19 cases in the last seven days, according to the Centers for Disease Control and Prevention. It ranked second behind Texas for U.S. states with the highest number of new cases in the past week.

A group of creditors to J.C. Penney Co. is seeking to slow the sale of the bankrupt retailer’s real estate to another group of lenders, saying that it provides the buyers an undeserved windfall and reeks “of not only greed but abhorrent bad faith,” Bloomberg News reported. The objecting creditors, led by Aurelius Capital Management, say they submitted a $750 million competing bid for J.C. Penney’s properties that would provide $600 million more to the bankrupt estate and more evenly distribute proceeds among creditors. They’re asking Judge David Jones to order a separate process for the property sale to the so-called DIP lender group, while proceeding with the sale of retailer’s operations to its two biggest landlords. “The lure of a windfall has so clouded the DIP lender group’s judgment that its members are seeking value far in excess of their entitlements under the Bankruptcy Code,” lawyers for the dissenting creditors wrote in an objection submitted on Friday. J.C. Penney has been racing to wrap up the planned two-part sale of its assets as the crucial holiday season approaches. The retailer has said the deal will save more than 60,000 jobs. Under the agreement, J.C. Penney’s assets would be bought by a group of firms including H/2 Capital Partners that provided J.C. Penney with debtor-in-possession, or DIP, financing to keep it operating while in bankruptcy. The lender group would then sell the retail operations to mall landlords Simon Property Group Inc. and Brookfield Property Partners.

In Michigan’s Western District — which spans 34 counties in the Lower Peninsula and the entire Upper Peninsula — small businesses like Purple East in Grand Rapids and six other entities as of Oct. 20 have elected to file for subchapter V relief established under the Small Business Reorganization Act (SBRA), MiBiz.com reported. In the Eastern District covering the rest of the state, 10 plans had been filed under subchapter V. The SBRA includes fewer costly requirements under a typical chapter 11 — for example, it doesn’t generally require debtors to file a disclosure statement. It also seeks to eliminate the potential for competing reorganization plans from creditors. Meanwhile, the law includes a 90-day deadline for a debtor to file a plan after a relief order. “The expedited process and the return have reduced costs and I think ended up with a better result for the creditors I’ve represented," said Richardo Kilpatrick, president of Troy-based Kilpatrick & Associates PC, who now serves as a subchapter V trustee under the new law. “We’re starting to see an uptick in (SBRA cases) and I think we’re going to see a lot of successful reorganizations now,” Almassian said. Todd Almassian, partner at Grand Rapids-based Keller & Almassian PLC, said requiring only debtors to file a reorganization plan while allowing them to retain a stake in the company are two key features of the SBRA. “In the past, the administrative expense burden and the procedural hurdles prevented some small companies from reorganizing,” Almassian said.

The three months of negotiations over a new round of virus relief moved no closer to a resolution over the weekend, all but extinguishing the prospects of a stimulus bill being written, voted on, and signed into law by President Donald Trump before the election, Bloomberg News reported. House Speaker Nancy Pelosi said she’s waiting for another counteroffer Monday from Treasury Secretary Steven Mnuchin, as she and White House Chief of Staff Mark Meadows accused each other of “moving the goalposts” in negotiations. Much of the weekend was devoted to work by congressional committees with the goal of writing legislation, but aides in both parties said little progress was made despite the pledges from both sides that they want to quickly deliver $1,200 stimulus payments to most Americans along with aid to struggling businesses. The Senate is set to leave Washington, D.C., on Monday after voting on the confirmation of Supreme Court nominee Amy Coney Barrett, and the House is already out. Both chambers could be called back for a vote with 24 hours notice, though that scenario is unlikely in the last week of campaigning before the national election.

Guitar Center has begun to prepare for a potential bankruptcy filing that could come as soon as next month, the New York Times reported. The retailer missed an interest payment of roughly $45 million earlier this month, setting off a 30-day grace period that could end in default. The country’s largest retailer of musical instruments has reached out to creditors to discuss a plan that would involve the company filing for bankruptcy this year and emerging from it in early 2021. It’s still possible that Guitar Center could avert bankruptcy, as it did earlier this year when it resolved a skipped interest payment in April with a distressed debt exchange. That led to a downgrade by the credit ratings agency Moody’s in May, which noted that the transaction did not “fundamentally change” the company’s “untenable” capital structure. It was the third cut in the company’s credit rating this year.

A bankruptcy judge authorized auto supplier Garrett Motion Inc. to designate a planned sale to private-equity firm KPS Capital Partners LP as the company’s best offer to date, giving it a leg up over others ahead of a competitive process, the Wall Street Journal reported. Bankruptcy Judge Michael Wiles said that the Garrett could tap KPS as the lead bidder, or stalking horse, to set a minimum price for the company and also approved $84 million in breakup fees and expenses for the proposed deal. Winning the stalking-horse designation was a key hurdle for KPS in its push to buy Garrett despite opposition from a majority of Garrett’s shareholders as well as former parent Honeywell International Inc., the creditor with the most to lose if the bankruptcy sale goes through.

Studio Movie Grill Holdings (SMG), the theater chain where film-goers can order Sriracha chicken sliders and a Cruzan mango mojito right in the middle of the latest blockbuster, filed for bankruptcy on Friday after the Covid-19 pandemic kept audiences away, Bloomberg News reported. “We plan to use this filing to strengthen our business by reducing liabilities and reposition SMG to emerge a stronger organization built for the future as we recover from the unparalleled impact of COVID-19,” Chairman Brian Schultz said in a letter on the company’s website. The outbreak forced SMG to temporarily close all its locations earlier this year. About a third of the company’s 33 theaters are still closed, according to its website; the rest are open for business as usual, it said. Secured lenders to the Dallas-based company agreed to provide a new loan to support its restructuring, according to the letter. Studio Movie Grill has assets between $50 million and $100 million and liabilities between $100 million and $500 million, according to its chapter 11 petition.