Trade shows and exhibitions that were shut down by the pandemic are now cautiously relaunching in Europe in a dress rehearsal for what show organizers hope will be a broader resumption of fairs next year, the Wall Street Journal reported. But judging by the shows that are beginning to take place, the pandemic has brought about lasting changes to a format that has hardly evolved over decades and organizers are rushing to adapt the shows to ensure their survival in a different form. This year’s shows in Europe, often combining a limited physical event with an online component, are unlikely to be highly profitable. But organizers say they will serve to test what works and what doesn’t ahead of next year, when they expect some economic normalcy to return and some travel restrictions to be lifted, even as the coronavirus continues to loom. “One thing is for certain; there will be hybrid trade shows in the future that will take place in the real world but will also be bolstered by digital media,” said Ernst Kick, chief executive of Spielwarenmesse eG, which organizes an annual toy fair in Nuremberg, Germany. The stakes are high not just for organizers and participants, but for hotels and restaurants across Europe’s cities that have come to depend on fairs for a large share of their business.
Neiman Marcus Group said on Friday that it expected to emerge from chapter 11 bankruptcy by the end of this month under a restructuring plan that is likely to eliminate more than $4 billion of its debt, Reuters reported. The luxury department store chain filed for bankruptcy protection in May, in one of the highest-profile retail collapses during the COVID-19 pandemic. The 113-year old company said certain institutional investors will fund a $750 million exit financing package that would fully refinance its debtor-in-possession loan and provide additional liquidity for its business. The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, approved Neiman Marcus’ reorganization plan.
The nation’s bricks-and-mortar retailers were undergoing a reckoning years before the pandemic led to shutdowns and a tanking economy, tipping more than a dozen major retailers into bankruptcy and prompting many others to thin their ranks. The result: Thousands of liquidation sales, at a time when many Americans are wary of in-store shopping or spending, the Washington Post reported. Firms that specialize in winding down stores say liquidating now is markedly different from what it was before the pandemic. Companies are offering deeper discounts to win over consumers — with sales starting at 40 percent off instead of the usual 20 percent — as well as other incentives. Even then, results can be spotty: Proceeds from liquidation sales have fallen about 25 percent since the novel coronavirus took hold, according to Jim Schaye, chief executive of retail liquidation firm Eaton Hudson.
Senators return to Washington, D.C., today from their annual summer recess, no closer than when they left three weeks ago to resolving sharp divisions over another coronavirus aid package and now facing a potential government shutdown that could deepen the economic pain, the New York Times reported. The impasse amounts to a fraught political situation for both parties less than two months before the November election, with millions still unemployed and cities and states beginning to enact significant budget cuts with no promise of relief from Congress. Senate Republican leaders are hoping to corral their caucus around a scaled-back stimulus plan that would reinstate lapsed federal unemployment benefits at $300 per week — half their previous level — and allocate $105 billion for schools and funds for testing and the Postal Service, according to Republican aides familiar with the discussions. The plan represents an effort to intensify pressure on Democratic leaders, who want to restore the $600 unemployment benefits and have refused to consider any measure below $2.2 trillion. The Republicans’ bill would carry a likely price tag of $500 billion to $700 billion, far less than the $3 trillion measure Democrats passed in the House and smaller than the $1 trillion measure Senate Republicans introduced in July. A procedural vote advancing the legislation could come as early as this week, according to Republican aides, but it remains unclear whether Republicans can coalesce around it. Even if they do, Democrats are expected to block it. In a letter to his caucus, Senator Chuck Schumer of New York, the minority leader, called the bill “emaciated” and urged Democrats to push for “another comprehensive, bipartisan bill that meets the moment facing our nation.” Lawmakers are more optimistic about the chances for a stopgap budget bill to avert a shutdown at the end of the month; Speaker Nancy Pelosi and Steven Mnuchin, the Treasury secretary, have reached an informal agreement on the bill. It is unclear how long the measure would provide funding after the new fiscal year begins on Oct. 1, but it would be all but guaranteed to last beyond the Nov. 3 election. Read more.
In related news, states and cities across the nation have made an array of fiscal maneuvers to stay solvent and are planning more in case Congress can’t agree on a fiscal relief package after the August recess, the New York Times reported. House Democrats included nearly $1 trillion in state and local aid in the relief bill they passed in May, but the Senate majority leader, Mitch McConnell of Kentucky, has said that he doesn’t want to hand out a “blank check” to pay for what he considers fiscal mismanagement, including the enormous public-pension obligations some states have accrued. There has been little movement in that stalemate lately. Economists warn that further state spending reductions could prolong the downturn by shaking the confidence of residents, whose day-to-day lives depend heavily on state and local services. “People look to government as their backstop when things are completely falling apart,” said Mark Zandi, chief economist at Moody’s Analytics. “If they feel like there’s no support there, they lose faith and they run for the bunker and pull back on everything.” Collectively, state governments will have budget shortfalls of $312 billion through the summer of 2022, according to a review by Moody’s Analytics. When local governments are factored in, the shortfall rises to $500 billion. That estimate assumes the pandemic doesn’t get worse. Read more.
Co-working company Regus Corp., which provides furnished workspace on short-term deals, has placed more of its portfolio into chapter 11 bankruptcy as office markets in U.S. cities deal with financial pressure caused by the coronavirus pandemic, WSJ Pro Bankruptcy reported. In recent days, Regus has put more than a half-dozen affiliates that hold leases in cities from New York to California into chapter 11 in U.S. Bankruptcy Court in Wilmington, Del. Among the latest filings, on Thursday, were Regus affiliates managing workspaces in New York City, Los Angeles and Denver. A handful of other Regus companies—including ones that hold leases in Philadelphia and San Jose—have been placed into chapter 11 in the past week. They joined other companies—with leases in Washington, D.C.; Arlington Va.; Columbus, Ohio; Chicago; Atlanta and Fort Lauderdale, Fla.—that were placed in bankruptcy in July and August. The latest filings were already contemplated in Regus’s overall restructuring strategy and affect a small portion of its holdings, about 2 percent of the company’s North American portfolio. The spate of filings comes after the company said it would use the breathing spell bankruptcy provides to continue negotiating with some of its landlords. The chapter 11 filings represent a small share of Regus’s overall portfolio. Regus offers on-demand workspace in more than 1,000 locations in the U.S. and Canada.
Bruin E&P Partners has emerged from bankruptcy that allowed the Houston oil and gas company to eliminate most of its debt, the Houston Chronicle reported. The company, backed by private equity firm ArcLight, eliminated more than $840 million of nearly $1.1 billion of debt from its balance sheet after emerging from chapter 11 bankruptcy this week. Bruin emerged from bankruptcy with a new board of directors, composed of Kevin Asarnow, Mark Bisso, Richard J. Doleshek, Mike Wichterich, and Matthew Steele. The company said it also has access to a new $230 million revolving line of credit. The privately-held company, which is focused on oil and gas production in North Dakota, filed for bankruptcy in July after its lenders reduced the company’s credit line, cutting its lifeline to remain in operation. At the time of its bankruptcy filing, Bruin had $11 million on hand.
As insurers brace for an expensive natural-disaster season because of storms and wildfires ravaging parts of the United States, the novel coronavirus is giving them an odd financial break, Reuters reported. Many companies that were damaged or evacuated because of natural catastrophes were already generating far less revenue due to the pandemic. That means they will get lower payouts upon filing business-interruption claims, according to analysts, lawyers and industry sources. It is another hit for small businesses that rebuilt after major disasters in recent years, only to see revenue screech to a halt during the pandemic, and then enter another aggressive disaster season. It could leave some companies unable to survive, said John Ellison, an attorney at Reed Smith LLP who has represented policyholders in cases stemming from hurricanes Katrina, Rita and Sandy. “There is a reasonable chance that any business in that situation is not going to make it,” he said.
AMC Entertainment Holdings Inc. is enticing risk-hungry stock investors to gamble on its recovery as the cinema chain continues its efforts to avoid bankruptcy, WSJ Pro Bankruptcy reported. AMC on Wednesday launched efforts to raise up to $180 million in equity capital, even though credit investors are valuing some of its bonds at roughly 40 cents on the dollar, implying serious doubts about whether they will be fully repaid. The coronavirus pandemic has walloped AMC’s business, forcing the company into restructuring talks with key creditors. A rescue deal in July supplied AMC with $300 million in financing and a reduction in debt, yet the company continues to burn through up to $100 million a month, due in part to restrictions in many states and countries to limit theater occupancy to 50 percent or less, according to analysts who track the company. AMC Chief Executive Adam Aron said the company is “just thinking ahead and being smart” while touting the threefold increase in AMC stock since it hit its low point of the year at $2.08 in April. Since the onset of the pandemic forced AMC to shut down its more than 1,000 theaters world-wide, the company has executed a series of financial engineering moves designed to help shore up its balance sheet.
Theme park operators who spent months installing hand sanitizing stations, figuring out how to disinfect roller coasters seats and checking the temperatures of guests at their gates so they’d come back in the midst of the pandemic are finding many reluctant to return, the Associated Press reported. Some parks have reduced operating days, slashed ticket prices, and closed early for the year because of lower-than-hoped attendance — expectations weren’t high to begin with — along with the uncertainty of what’s to come with the coronavirus. A few parks have been unable to open their gates at all because of state and local health restrictions. Disney this week will begin cutting an hour or two out of each day at its four Florida theme parks. It already called off its annual after-hours Halloween party at the Magic Kingdom. Neighboring Universal Orlando also nixed its Halloween Horror Nights. Amusement parks across the South that had their seasons delayed by virus outbreaks in the spring deal with a second punch with the summer flareups across the Sun Belt. Some, including Kings Dominion in Virginia and Carowinds in North Carolina, never opened and won’t this year. Cedar Fair Entertainment, which operates those two, has reopened just half of its 13 amusement parks and water parks across North America.
