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Affiliates of co-working company Regus Corp. have been authorized to start drawing from a $50 million bankruptcy loan made by their parent to cover rent payments to dozens of landlords as the business works to restructure office leases, WSJ Pro Bankruptcy reported. Regus has placed under chapter 11 protection more than 100 corporate affiliates that hold office leases in New York, Los Angeles, Chicago, Philadelphia, Atlanta and other cities where the coronavirus pandemic has depressed commercial-real-estate markets. The company, which provides furnished workspaces under short-term deals, hasn’t filed for bankruptcy itself. The chapter 11 filings represent a small share of Regus’s portfolio of on-demand workspace in more than 1,000 locations in the U.S. and Canada. The filings are designed to pry concessions from landlords as white-collar workers largely continue avoiding offices in major metropolitan areas. By placing the companies — created to rent and manage workspaces in particular cities — into bankruptcy protection, Regus can get out of long-term lease obligations in return for a one-time penalty. Regus might put more affiliates into chapter 11 depending on the continued impact of Covid-19 and negotiations with landlords, bankruptcy lawyer Chad Husnick said during a Tuesday hearing in the U.S. Bankruptcy Court in Wilmington, Del. At the hearing, the judge overseeing the bankruptcy cases authorized the affiliates to draw $17.5 million from a chapter 11 loan advanced by Regus. The affiliates can come back to the bankruptcy judge later to seek permission to draw the remainder of the loan, a common move in chapter 11.

Some property owners think this would be a fair trade off in the clamor for more flexible rent arrangements. So far, though, there is no good way to measure what landlords might be entitled to and tenants have few reasons to play ball, the Wall Street Journal reported. From global fashion players like Zara and H&M to mom-and-pop stores, most retailers are demanding better terms from landlords as the COVID-19 pandemic slows sales, particularly offline. In the U.K., shop owners received only two-thirds of the quarterly rent they were owed in the three months to Sept. 22, according to data by Remit Consulting. More tenants now want to hand over a percentage of their sales as rent rather than a fixed monthly or quarterly fee, an arrangement already common in the U.S. Retailers, which are already paying rent on e-commerce warehouses and often don’t make strong margins on online sales, will be understandably reluctant to hand over a cut. But there is some evidence that physical stores drive digital purchases. Opening a new shop in an area increases traffic to the retailer’s website by 37 percent, according to a study by the International Council of Shopping Centres.

Walt Disney Co. said yesterday that it will lay off roughly 28,000 employees, mostly at its U.S. theme parks, where attendance has been crushed by the coronavirus pandemic, especially in California where Disneyland remains closed, Reuters reported. About two-thirds of the laid-off employees will be part-time workers, the company said in a statement. Disney shut its theme parks worldwide when the novel coronavirus began spreading this year. All but Disneyland — nicknamed the Happiest Place on Earth — reopened, though the company was forced to limit the number of visitors to allow for physical distancing. “We have made the very difficult decision to begin the process of reducing our workforce at our Parks, Experiences and Products segment at all levels,” Josh D’Amaro, chairman of the parks unit, said in a statement. He cited the parks’ limited capacity and uncertainty about the pandemic’s duration, which he said was “exacerbated in California by the state’s unwillingness to lift restrictions that would allow Disneyland to reopen.”

House Democrats released a scaled back $2.2 trillion proposal to extend support to the U.S. economy in face of the continuing damage from the coronavirus pandemic, Bloomberg News reported. The plan follows through on discussions last week to prompt a last-ditch attempt at negotiations with the White House and break an impasse on COVID-19 relief that’s lasted since early August. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin talked yesterday after the Democratic plan was released and plan to speak again today, Pelosi’s spokesman said. While the details of the legislative text adds clarity to the talks, the top-line spending level is no closer to that so far supported by Republicans. President Donald Trump has indicated he could support as much as $1.5 trillion in aid — still higher than the $650 billion put forth in a “skinny” aid package by Senate Republicans earlier this month. Should no deal be forthcoming, House Democrats have said they aim to proceed on their own in voting on the new plan, allowing the party’s candidates in the Nov. 3 elections to highlight a recent vote on coronavirus relief. The last vote was on the bigger, $3.4 trillion HEROES Act back in May. A key source of division has been Democrats’ push for large-scale aid to state and local authorities. The plan released yesterday has $436 billion for one year of assistance, less than a previous demand for $915 billion, which had triggered scorn among Trump administration officials who called it a bailout for poorly run states. The Democratic plan includes new aid for airlines, restaurants and small businesses that wasn’t in in the original package passed by the House in May, and it has more than double the amount for schools. 

Americans feeling the economic weight of the coronavirus are about to enter their third month without crucial government aid that helped keep millions of households afloat during the recession, The Hill reported. Two months have passed since Congress and the White House allowed emergency COVID-19 protections and safety net programs to expire. Those provisions, enacted in late March under the CARES Act, were credited with preventing an even worse economic downturn. Now, families are struggling to get by without supplemental unemployment funding, and many small businesses are reaching the end of financial lifelines that were extended by the federal government in the spring and summer. The lapse of emergency measures is expected to create lasting damage to the economy, making it even harder to return to pre-pandemic levels of growth and unemployment. “The damage on these families can scar for years,” said Andrew Stettner, an unemployment expert at the left-leaning Century Foundation. One of the biggest losses is the $600 in additional weekly benefits that Congress approved in the CARES Act. Economists across the political spectrum credit that provision with keeping consumer spending from cratering during one of the sharpest and most destructive downturns in the nation’s history. Despite broad bipartisan support for the CARES Act, Republicans have argued that the federal benefit was too high, pointing to some studies that showed 68 percent of recipients were earning more with the benefit than they did while working. GOP lawmakers said that discrepancy was a disincentive for people to go back to work, further slowing the recovery. Democrats countered with a slew of studies showing the benefit was having no tangible effect on the labor market at a time when unemployment was at historic highs.

America’s small businesses are slightly more bullish about their own survival than five months ago, with a majority now saying they expect to be operating beyond six months even if current conditions persist, according to a new survey, Bloomberg News reported. Sixty percent of business owners said that they will be able to remain open for more than a half-year, up from 46 percent in April, according to the poll, conducted by Morning Consult on behalf of Verizon Business. The survey firm questioned owners and decision makers at 600 small and midsize firms from Aug. 26 to Sept. 4. As prospects of a new stimulus deal remain slim after negotiations stalled in the U.S. Congress, small-business advocates have warned that the nation is on the precipice of widespread business failures and bankruptcies amid the COVID-19 pandemic. While it’s premature to say whether that will happen, a significant minority, 28 percent, indicated they may not make it through the next few months without additional government relief. Among other findings in the survey, hospitality and accommodations businesses are the least confident in their longtime survival prospects, with 47 percent expecting to operate beyond six months if conditions don’t improve. The most optimistic respondents were in the property and real-estate industry, with 78 percent expecting to survive even under present conditions.

Fannie Mae and Freddie Mac, the government-run companies that stand behind about half of the $11 trillion U.S. mortgage market, pose a potential danger to the stability of the broader financial system, a Treasury-led panel said on Friday, Politico reported. The companies still do not have enough capital to protect themselves from the massive risk in their portfolios, the Financial Stability Oversight Council concluded following a long-awaited review of the secondary mortgage market, where investors purchase home loans. The council, which consists of all the government's top financial regulators, endorsed a proposal to raise capital requirements for Fannie and Freddie, saying it would go a long way toward mitigating the peril looming over the system. Fannie and Freddie have been at the center of a fierce debate between Republicans and Democrats ever since the government rescued the two companies from collapse during the 2008 financial crisis. Republicans have pushed to boost their capital to prepare them for privatization. But some Democrats and affordable housing advocates warn that the stricter capital requirements could drive up the cost of mortgages and limit Fannie and Freddie’s ability to serve low-income communities.

Neiman Marcus Holding Co. said on Friday that it has completed its chapter 11 bankruptcy protection process, emerging from one of the highest-profile retail collapses during the COVID-19 pandemic, Reuters reported. Its restructuring plan eliminated more than $4 billion of debt and $200 million of annual interest expense. The luxury department store chain said it had a new board of directors, including former LVMH North America Chairman Pauline Brown and former eBay Inc. Chief Strategy Officer Kris Miller. Geoffroy van Raemdonck will continue to serve as chief Executive Officer of Neiman Marcus Group, which had filed for bankruptcy protection in May. The 113-year-old company’s new owners, which include PIMCO, Davidson Kempner Capital Management and Sixth Street Partners LLC are funding a $750 million exit financing package that fully refinances its debtor-in-possession loan.