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Congressional pressure is growing on the U.S. Treasury to help salvage trucking giant Yellow from bankruptcy, from Republicans and Democrats alike, letters viewed by Reuters show. Republican Senator Josh Hawley is the latest lawmaker to ask Treasury, in a letter on Thursday, to extend the terms of a controversial $700 billion pandemic loan granted by the Trump administration to Yellow. It follows separate letters sent by Republican Senator Roger Marshall and Democrats Sherrod Brown and Bob Casey last month. Earlier this week, Democratic senators Elizabeth Warren and Ed Markey sent letters. Republicans and Democrats pushing Treasury could benefit Jack Cooper, one the largest U.S. privately owned auto transport companies, making its long-shot bid to rescue Yellow from bankruptcy liquidation more likely. Key to Jack Cooper's bid is convincing Treasury to extend the loan currently due at the end of September 2024 to the same time in 2026, allowing Jack Cooper to offer more favorable terms for Yellow.

Hwa Yuan Szechuan, one of Manhattan’s most critically acclaimed Chinese restaurants, filed for bankruptcy on Monday, a sign of the pressures that restaurants around the country are facing as they fight to keep their slice of consumers’ stretched food budgets, WSJ Pro Bankruptcy reported. Started by Taiwanese immigrant Yu Fa Tang in the late 1960s, Hwa Yuan has operated in its current location in New York’s Chinatown since 2018. Famed for popularizing cold sesame noodles in the U.S. and frequented by A-list celebrities such as Jennifer Lawrence and Gwyneth Paltrow, the restaurant hasn’t recovered from the impact of COVID-19-related lockdowns on its finances, according to court papers. Even though it received a publicity boost when former New York Mayor Bill de Blasio visited the restaurant in February 2021 to promote the resumption of indoor dining in New York City, Hwa Yuan defaulted on its mortgage because of its pandemic-related loss of revenue and now faces an imminent foreclosure from its mortgage lender, according to court papers. The restaurant’s bankruptcy filing in New York’s Southern District will stave off the foreclosure and give the Tang family time to find a new loan that could repay the defaulted mortgage, court papers said.

A senior-living company filed for bankruptcy this week after it exhausted an emergency loan, the latest to falter because of COVID-19, Bloomberg News reported. Nashville Senior Care LLC’s plight illustrates the pressures bearing down on the senior-living sector. Higher staff and supply costs on top of tepid demand for such facilities have caused defaults to outpace the rest of the municipal bond market this year. About 8% of the $43 billion in outstanding senior-living bonds is in default, compared with less than 1% of the total municipal bond market, according to data compiled by Bloomberg. At Nashville Senior Care, the pandemic shutdown lowered the number of residents “precipitously,” while expenses rose “dramatically,” leaving the facilities without the means to make needed investments, executive director Thomas Johnson said in a court filing. “This difficult combination of rising costs and a lower census, coupled with a high debt load from their financing, led to the Debtors’ default under their bond documents,” added Johnson, founder of the nonprofit Trousdale Foundation, which owns the facilities. The operator of five senior living facilities and one home health company in Tennessee, Florida and Ohio listed assets of $50 million to $100 million and liabilities of $100 million to $500 million, including about $213 million in municipal bond debt. Its bonds have been hit hard by the pandemic. A bond, issued by Highlands County Health Facilities Authority, due in 2038 with a 6% coupon traded at 12 cents in June.

Policy actions taken during the pandemic led to "the most equitable" recovery in recent history, a new government report found, YahooFinance.com reported. The study released yesterday by the Treasury Department found that the president’s American Rescue Plan Act (ARPA), along with actions taken by state and local governments, prevented the worst economic outcomes for Black and Hispanic families during the COVID pandemic, groups that were the hardest hit during that time and have historically been more vulnerable to downturns. The federal aid — including stimulus checks, rental assistance, and the expanded child tax credit — in combination with local support and the Federal Reserve efforts helped sustain Black and Hispanic household finances, narrow the wealth gap, and improve some economic indicators relative to the pre-pandemic period. Read more.

Click here to access the full Treasury Department report.

Seventeen deputies at a South Florida sheriff’s office were charged with defrauding federal loan programs of nearly half a million dollars intended to help businesses that were struggling during the coronavirus pandemic, the authorities said, the New York Times reported. The employees of the Broward Sheriff’s Office were charged in separate cases of wire fraud in connection with collecting money from the Paycheck Protection Program and the Economic Injury Disaster Loan, Markenzy Lapointe, the U.S. attorney for the Southern District of Florida, announced at a news conference in Fort Lauderdale, Fla., on Thursday. Sheriff Gregory Tony of Broward County said that the deputies facing charges represented “a cross-section of multiple disciplines” within his agency. Eight of them, including a sergeant, work in the law enforcement department, and nine, also including a sergeant, are assigned to the department of detention.

Business bankruptcies are rising briskly. What’s even more worrisome: Many of the troubled companies are large, according to a Wall Street Journal analysis. Corporate behemoths including SVB Financial, Bed Bath & Beyond and Yellow sought chapter 11 bankruptcy protection this year. The filers blamed elevated inflation, higher interest rates, waning government aid and lingering supply-chain disruptions. More corporate filings are likely on the way as high interest rates push big companies over the edge. While any type of bankruptcy signals distress, large-business bankruptcies carry particularly significant economic risks. To be sure, the rise in business bankruptcies is a far cry from the 2008 financial crisis or the 2020 pandemic downturn, when widespread layoffs led to economic pain. Big-business bankruptcies were unusually low last year, so some of the increase reflects a normalization. The economy is still growing as consumers splurge and businesses snatch up workers. Employers added a surprisingly robust 336,000 jobs in September, with hiring widespread across industries. “Companies have been surviving the past few years by taking advantage of the ultralow interest rates,” said Amy Quackenboss, executive director at the American Bankruptcy Institute. “But many of these corporations are seeing those loans come due now, and they’re struggling to refinance because the interest rates now are significantly higher.”

U.S. restaurant employment reached pre-pandemic levels in September for the first time in three-and-a-half years, according to a report released Friday, signaling a potentially broader recovery for the leisure and hospitality industry, Reuters reported. The number of Americans employed in food service increased by 61,000 in September from the prior month, Bureau of Labor Statistics (BLS) data released as part of the monthly U.S employment report showed. Food service and hospitality workers accounted for the majority of jobs added in the wider leisure and hospitality sector, which added 96,000 jobs last month. The gains in restaurant and bar employment last month were almost double the average of 37,000 jobs added monthly over the past year. Overall, American employers added 336,000 jobs in September, and the unemployment rate remained unchanged in September at 3.8%, the BLS reported.

The Internal Revenue Service has labeled promoters of a popular pandemic-era tax credit as unscrupulous scammers. The agency’s task ahead: Turning that tough talk into victories in court, the Wall Street Journal reported. Tax lawyers say they expect several busy years defending tax-credit consulting firms and employers as the IRS tries to claw back some of the $230 billion it paid in employee-retention credits, or ERC refunds. The enforcement push, including criminal prosecutions, won’t be quick or easy for the IRS. “One acquittal is worse for the government than 1,000 guilty verdicts, because the acquittal spreads the word,” said Frank Agostino, a tax lawyer at Agostino & Associates in Hackensack, N.J. “The government needs to create the perception of invincibility." The tax agency has some advantages, including a flush enforcement budget and thousands of new staffers it is hiring. Attorneys say the IRS should be able to impose stiff penalties on some ERC firms that urged employers to seek refunds, despite the firms’ attempts to avoid signing returns and push crucial eligibility decisions onto clients.