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Ed’s Beans Inc., the parent company of Cranberry-based Crazy Mocha and Kiva Han Coffee, filed for chapter 11 protection this week, claiming it owes more than $4.75 million to more than 50 creditors, the Pittsburgh Post-Gazette reported. Total assets owned by the company fall in the $100,000 to $500,00 range, according to the court filing. The petition, filed Monday in the U.S. Bankruptcy Court for the Western District of Pennsylvania, indicates that the company’s biggest creditor, First Commonwealth Bank, is owed $2.4 million. The founder of Crazy Mocha, Ken Zeff, who sold the company two years ago to Ed’s Beans, is owed $685,000. Zeff started the company in 2000 and sold the chain in March 2018 to Ed Wethli, owner of Ed’s Beans. For years, the Pittsburgh-born coffee chain held its own against a national brand like Starbucks and several other independent coffee shops in the competitive Downtown market and beyond the city limits into the suburbs. COVID-19 turned the tables on Crazy Mocha and wreaked havoc on coffee shops across the country due to social distancing limitations and rules that were put in place to protect staff and customers from infection.

Prospects for an economic relief package in the next two weeks dimmed markedly on Tuesday after Senate Majority Leader Mitch McConnell (R-Ky.) revealed that he has warned the White House not to strike an agreement with House Speaker Nancy Pelosi before the Nov. 3 election, the Washington Post reported. In remarks at a closed-door Senate GOP lunch, McConnell told his colleagues that Pelosi (D-Calif.) is not negotiating in good faith with Treasury Secretary Steven Mnuchin, and that any deal they reach could disrupt the Senate’s plans to confirm Amy Coney Barrett to the Supreme Court next week. Republicans have voiced concerns that a stimulus deal could splinter the party and exacerbate divisions at a time when they are trying to rally behind the Supreme Court nominee. McConnell’s attempted intervention came as Pelosi and Mnuchin continued negotiating over the roughly $2 trillion economic relief package. Pelosi spokesman Drew Hammill said that the “conversation provided more clarity and common ground as they move closer to an agreement.” But no deal can become law without McConnell’s blessing, and his direct warning to the White House imperils the chances of any bill becoming law in the next two weeks.

J.C. Penney Co. has formalized a planned sale to its bankruptcy lenders and biggest landlords, but must first finalize a staggering lease agreement in less than a week to close the deal, Bloomberg News reported. The retailer yesterday filed a draft purchase agreement detailing a plan to sell itself to mall owners Simon Property Group Inc., Brookfield Property Partners and its senior lenders. But the parties have until Monday to finalize a master lease agreement between the mall landlords and the lenders who will own most of the retailer’s real estate, Josh Sussberg of Kirkland & Ellis said in a court hearing on behalf of J.C. Penney. It’ll be a sprint to wrap up “what I assume to be one of the longest and most complex lease agreements known to mankind,” said Judge David Jones, who is presiding over the case. A lawyer for J.C. Penney’s biggest lenders echoed the sentiment, saying that it’s “beyond the most complex document I’ve ever seen” and has “so many open issues.” J.C. Penney is also facing a competing sale proposal from a smaller group of lenders including Aurelius Capital Management. That group has obtained financing commitments for a similarly structured deal at a “much higher and much better” price, Phil Dublin of Akin Gump Strauss Hauer & Feld said on behalf of the lenders. The current purchase agreement follows an arduous sale process that included marathon mediation sessions last weekend, Sussberg said, adding the parties agreed to the structure of the deal just after 6 a.m. Tuesday. Sussberg said he’s “highly confident” that “J.C. Penney’s future is secure.” The sale may save more than 60,000 jobs at the retailer, according to court papers.

AMC Entertainment Holdings Inc., the world’s largest cinema chain, agreed to sell as many as 15 million shares of its stock while warning investors that it may need to file for bankruptcy, leaving its equity worthless, Bloomberg News reported. AMC, contending with a liquidity crisis that threatens its ability to remain a going concern, said that the equity distribution plan might not be enough. With $417.9 million in cash on hand, the company still needs a material amount of new funding by the end of the year to stay in business, it said in a filing yesterday. If AMC is unable to raise enough cash to meet its obligations, the company said that it would file for bankruptcy or seek an out-of-court restructuring of its debts. In the event of a liquidation or bankruptcy, AMC’s shareholders would likely suffer a total loss of their investment, the company said. The company “remains in a precarious cash position with a burn rate of about $100 million per month,” Eric Handler, an analyst at MKM Partners, wrote in a note yesterday. AMC and other movie-theater owners have been trapped in a tough situation since the coronavirus pandemic forced auditoriums to close in the spring. While many locations have reopened, capacity restrictions and audience skittishness have deeply hurt revenue. 

Gulfport Energy, a major player in Ohio’s Utica Shale, is expected to file for a chapter 11 reorganization in the coming days, Kallanish Energy reported. The company, its revolver lenders and unsecured bondholders are expected to seek approval for a restructuring support agreement that includes debtor-in-possession financing. The Oklahoma-based company is dealing with about $2 billion in debt. The filing is expected in U.S. Bankruptcy Court in Houston, Texas. The company said that it is continuing “ongoing constructive discussions with its lenders and certain other stakeholders regarding a potential comprehensive financial restructuring to strengthen the company’s balance sheet and financial position.” That statement was part of a Gulfport filing on Friday with the U.S. Securities and Exchange Commission. On the previous day, the company elected to go into a 30-day grace period and to defer making the interest payment due on Oct. 15 with respect to its 6.0 percent senior unsecured notes due 2024. Gulfport said it has 30 days to make the interest payment before going into default.

Sinclair Broadcast Group Inc.’s regional sports business and its creditors are preparing for a possible restructuring of its roughly $8 billion debt load, a sign of the pressure on the sports industry from COVID-19, WSJ Pro Bankruptcy reported. Diamond Sports Group LLC’s bondholders have hired legal and financial advisers as the Sinclair subsidiary deals with the dearth of live sports during the coronavirus pandemic and the loss of some carriage deals with pay-TV distributors. The unit’s debt stems from a big bet on regional sports that Sinclair made last year when it bought 21 networks from Walt Disney Co., an acquisition valued at $10.6 billion and financed through one of the largest U.S. junk-bond sales in years. Senior bondholders have tapped law firm Gibson, Dunn & Crutcher LLP to assist with potential restructuring talks, while junior bondholders have engaged law firm Stroock & Stroock & Lavan LLP and investment bank PJT Partners Inc., the people said. The company is working with investment bankers at Moelis & Co., they said. When professional sports leagues paused their seasons as the coronavirus began spreading in the U.S., regional sports networks, or RSNs, were left without live games, the linchpin of their business.

Movie-theater companies of all sizes are confronting unprecedented financial strain during the pandemic as capacity restrictions, moviegoers’ reluctance to return to cinemas and a dearth of high-profile movies from big studios limit their chances of mounting a comeback. Although national cinema chains have been hit, too, for small family-owned operators, the problems are particularly acute and personal, WSJ Pro Bankruptcy reported. They don’t have large financial cushions, making them especially vulnerable to downturns that can wipe out family livelihoods. All U.S. states have now allowed theaters to reopen at limited capacity, though restrictions on key areas such as New York City and Los Angeles County remain a major problem for movie-theater owners nationwide. Not just the nation’s most lucrative movie-theater market, New York also is home to many prominent film critics whom studios rely on to generate media buzz. Partly because of these closures, studios have been postponing the release of high-profile films, leaving theaters without fresh material to woo patrons. Some expect many theaters to close for good if the logjam continues. John Fithian, president of the National Association of Theatre Owners, the cinema industry’s main lobbying group, said that only about 5 percent of member theaters have shut permanently. But without either a federal stimulus package or a reopening of New York City theaters, he said, more than a quarter of small to midsize theaters expect to go out of business by the end of October and 69 percent by year-end, according to a survey of the group’s members.

The market for leveraged buyouts has sprung back to life after private-equity firms finished triaging their coronavirus-stricken portfolio companies and shifted attention back to their mounting cash piles, the Wall Street Journal reported. Buyout firms spent the bulk of the second quarter battened down as they assessed the economic damage of the shutdown on the companies they own, particularly those in hard-hit sectors such as live entertainment, travel, retail and energy. Those in need conserved cash, drew down revolving-credit facilities or sought rescue financing. That trend reversed itself in the three months ended Sept. 30 as firms struck $146 billion of new deals globally, up from a feeble $53.3 billion in the second quarter and $103.8 billion in the third quarter of 2019, according to Dealogic. In the opening weeks of the fourth quarter, $17.4 billion of buyouts have already been announced. Some of those were new deals, and another chunk represented the resumption of sale processes that were put on hold when the virus struck, according to bankers and buyout executives. Facilitating the comeback was the return of the market for leveraged loans, the below-investment-grade loans used to fund many buyouts, which retreated significantly when most of the world went into lockdown.