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Denbury Resources Inc. got the green light to exit bankruptcy with a plan that hands the oil-and-gas producer to creditors and cuts $2.1 billion in bond debt, WSJ Pro Bankruptcy reported. Bankruptcy Judge David R. Jonesapproved Denbury’s prepackaged chapter 11 plan during a hearing on Wednesday. The plan had broad creditor support and calls for the company’s second-lien bond and convertible notes to be exchanged for nearly all of the equity in the reorganized company. The company’s lenders are also providing $615 million in exit financing to help it leave chapter 11. Fidelity Management & Research Co. and GoldenTree Asset Management LP, both major holders of Denbury bond debt, will pick some members of the company’s new board under the plan. Other bondholders backing the plan include Cyrus Capital Partners LP and J.P. Morgan Investment Management Inc., court papers say. Plano, Texas-based Denbury filed for bankruptcy protection in July, one of several energy companies pushed into chapter 11 over the past six months by the market downturn caused by the coronavirus pandemic and a drop in oil prices due to a price war between Russia and Saudi Arabia. Before the pandemic, Denbury had been exploring ways to address its debt load outside bankruptcy court. The company listed $3.1 billion in total debt when it filed for chapter 11 protection.

Members of New York Sports Clubs, the fitness chain that warned it’s close to bankruptcy, woke this week to find that an automated monthly charge for dues has been fully reinstated as the gyms partially reopen, Bloomberg News reported. The club’s owner, Town Sports International Inc., billed its members for full September dues despite the gyms’ limited operating hours and reduced capacity. The charges are drawing ire from some members and facing fresh scrutiny from the New York attorney general, who in April struck a deal forcing the company to credit thousands of members for the weeks they’d been barred from the facilities during the early stage of the pandemic. New York Governor Andrew Cuomo gave fitness centers in the state the OK to reopen, though locations must limit capacity at 33 percent, require masks and meet strict ventilation guidelines. With gym-going hardly back to normal, some members were surprised to face full dues charges on short notice. Pandemic-related closures hit the chain hard, but even before COVID-19, Town Sports was struggling to adapt to changing tastes that had consumers gravitating from mid-priced gyms to alternatives like boutique fitness studios. The company said on Tuesday that it may file for bankruptcy “in the near future” to restructure its debt if negotiations with lenders fail.

U.S. property insurers have won a flurry of judicial rulings backing up their rejections of claims for businesses’ lost income during government-ordered shutdowns, dimming policyholders’ hopes of payments to help them rebound, the Wall Street Journal reported. In recent weeks, insurers have won more rulings than policyholders as the courts begin to work through more than 1,000 COVID-19 business-interruption coverage disputes. Still, policyholders scored success in a federal court in Missouri, boosting efforts to interpret property insurance as covering claims from the coronavirus. Across the U.S., restaurants, hair salons, retailers and other businesses are seeking policy proceeds to deal with the huge economic cost of the shutdowns, in one of the biggest fights the insurance industry has ever waged with its policyholders. In the rulings, the judges sympathize with businesses’ plight, but most so far support insurers’ legal arguments. Insurers say the policies are intended to help policyholders as they recover from events, such as fires, that lead to repairs and rebuilding, and were never intended to cover virus-related claims. Read more. (Subscription required.) 

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The feds have made another arrest tied to Paycheck Protection Program (PPP) loan fraud. This time, it's an attorney facing charges. Jae H. Choi, who has an office in Fort Lee, N.J., has been accused of fraudulently obtaining nearly $9 million in PPP loans, Forbes reported. Choi has been charged with three counts of bank fraud and one count of money laundering. According to the complaint, Choi submitted three fraudulent PPP loan applications to three different lenders on behalf of three businesses that allegedly provided educational services. Choi allegedly falsely represented to lenders that the companies had hundreds of employees and paid over $3 million in monthly wages. To do this, he reportedly fabricated the existence of those employees, manipulated bank and tax records, and falsified a driver's license on the applications. A recent report by the House Select Subcommittee on the Coronavirus Crisis advised that over $1 billion in COVID-19 relief went to companies in violation of the program's rules. Specifically, 10,856 loans (totaling more than $1 billion) appeared to be multiple loans to the same recipient. The report also found more than 600 loans (totaling more than $96 million) went to companies that have been debarred or suspended from doing business with the federal government. And there were also more than 350 loans (totaling more than $195 million) that went to government contractors previously flagged by the federal government for performance or integrity issues.

Chicago is looking to the $3.9 trillion municipal-bond market for options to close its ballooning budget deficits, according to Chief Financial Officer Jennie Huang Bennett, Bloomberg News reported. Options on the table include selling pension obligation bonds, as well as refinancing general obligation and sales tax-backed bonds, Bennett said in a telephone interview on Wednesday. The refinancing of a yet-to-be-determined amount of debt is targeted for the fourth quarter, she said, adding it could save as much as $100 million in the 2020 budget. Mayor Lori Lightfoot on Monday projected that the 2020 deficit in the corporate fund, which accounts for most services the city offers, would expand to almost $800 million from a June projection of $700 million. The gap would reach $1.2 billion in 2021 with revenue losses connected to the COVID-19 pandemic making up 65 percent of the hole. A complete budget proposal will be released in October.

Airlines for America, the main lobby for U.S. airlines, does not expect air travel to return to pre-pandemic levels until 2024 and is hoping for a second round of government aid to help the industry, CEO Nicholas Calio said yesterday, Reuters reported. “We’ve probably concluded that no one will be fully confident until” there is a treatment or vaccine for COVID-19, which has put the airline industry in a “dire situation,” Calio told a virtual media briefing.

A U.S. bankruptcy judge yesterday granted recognition of Virgin Atlantic’s rescue plan under chapter 15 of the U.S. Bankruptcy Code, Reuters reported. The airline’s 1.2 billion pound ($1.59 billion) rescue deal is set for completion this week after a London judge gave the go-ahead to the company’s restructuring plan in a court hearing on Wednesday. The deal aims to secure Virgin Atlantic’s survival through the coronavirus crisis. The airline had projected it would run out of cash at the end of September unless the plan was approved. Read more. 

In related news, Virgin Australia Holdings Ltd’s creditors voted today in favor of the purchase of Australia’s second-biggest airline by U.S. private equity group Bain Capital, administrator Deloitte said, paving the way for a strategic overhaul, Reuters reported. The deal will allow the carrier to emerge from voluntary administration, which it had entered in April owing A$7 billion ($5 billion) to creditors after suffering from a sharp plunge in demand due to the coronavirus pandemic. The Bain deal gives unsecured creditors a return of 9 percent to 13 percent of their investment and involves a financial commitment of A$3.5 billion, according to administrator Deloitte, which said Virgin shares should be transferred to the private equity group by Oct. 31. Read more.