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Hertz Global Holdings Inc. has received interest from several potential buyers for its Donlen fleet business and is considering a sale if it can get at least $1 billion, Bloomberg News reported. Hertz, which filed for chapter 11 bankruptcy protection in May, sees Donlen as nonessential to its core rental business and is willing to consider selling it to satisfy some debt obligations and enable the company to more easily raise debtor-in-possession financing, one of the people said, asking not to be named because the talks are private. The rental company has been jettisoning some of the vehicles in its fleet to pay creditors and to downsize its operations for a shrunken travel business. Hertz slipped into bankruptcy after the COVID-19 pandemic decimated air travel and car rental volumes. Donlen’s suitors are chiefly private equity funds. Their ability to raise capital could help Donlen, which pays higher interest rates because its parent is bankrupt. Hertz hasn’t made a final decision on pursing a sale and its plans could still change.

The owner of the New York Sports Clubs chain said it may need to file for bankruptcy “in the near future” as many gyms across the country remain closed to stem the spread of COVID-19, Bloomberg News reported. Town Sports International is in talks with its lenders to refinance a loan coming due this fall as its cash flow and liquidity continue to tighten, the company said in a regulatory filing yesterday. The gym owner and operator said that it doesn’t have enough cash on hand to repay the debt when it comes due in November. The company missed a payment on its revolver last month, violating terms of the debt. Lenders could send the company a notice of default and demand immediate repayment of all obligations, but none has done so yet, Town Sports said in the filing.

President Donald Trump said yesterday that his administration would help U.S. airlines facing sharp downturns in passenger traffic as a result of the novel coronavirus pandemic, but gave no details, Reuters reported. “We’ll be helping the airlines. You have to help the airlines,” Trump told reporters before departing on a visit to Kenosha, Wisconsin. “Airlines are a tough business in good times.” White House Chief of Staff Mark Meadows last week said Trump was weighing executive action to avoid massive layoffs at airlines if Congress fails to agree on a fresh economic stimulus package to counter the fallout from the pandemic. Helping the airline industry is a “significant concern” for the Trump administration given its strategic importance for national security and supply chains, in addition to the large number of jobs at stake, a senior administration official said. The official said there was significant bipartisan support in Congress for measures to help airlines and ensure they survived the prolonged collapse in demand. U.S. passenger airlines are still collectively losing more than $5 billion a month as 30 percent of planes remain parked. Passenger travel demand is down about 70 percent and, on average, planes that are flying are half-full.

Many businesses drew down their lines of credit in the early days of the pandemic to shore up liquidity and prepare for a potential market collapse. Now, a few months later, they are paying back the billions in such emergency funds they borrowed, as sweeping interventions by the Federal Reserve opened up cheap access to capital markets and offered companies a chance to bolster their financial flexibility, the Wall Street Journal reported. Companies raised over $900 billion in capital through U.S. bond sales between April 1 and Aug. 31, more than double the volume from a year earlier, according to data provider Dealogic. Dozens of them have used some or all of the proceeds of their bond sales to pay down their revolving credit facilities, ratings company Moody’s Investors Service found.

Treasury Secretary Steven Mnuchin said yesterday that the Trump administration and Senate Republicans have been in regular contact over possible coronavirus relief measures and the Senate’s top Republican will “hopefully” unveil a new bill next week,  Reuters reported. Asked about the collapse of talks with Democrats over aid legislation, Mnuchin said that he and White House Chief of Staff Mark Meadows have been speaking regularly with Senate Republican leader Mitch McConnell. “Hopefully Mitch will enter new legislation next week,” Mnuchin said. No negotiations on another round of coronavirus aid have taken place since early August, when talks collapsed as Congressional Democrats and the Republican Trump administration could not bridge a gap of more than $1 trillion between their proposed relief packages for small businesses, state and local governments, school districts and health care providers. Trump has since signed an executive order extending expired supplemental unemployment benefits and deferring some payroll taxes, but details on implementation have been uncertain. Mnuchin is due to testify today before the Democrat-controlled House Select Subcommittee on the Coronavirus Crisis on the administration’s economic response. Republicans who control the U.S. Senate have discussed proceeding with their own legislation that would be narrower than the House’s $3 trillion plan approved in May, but thus far have not introduced any new proposals. Some Republicans oppose new aid out of concern for a massive and growing budget deficit predicted to approach $4 trillion this year. 

COVID-19’s economic impacts, from job losses to business closures and relief measures, have disproportionately affected Black Americans as much as the virus itself. And if history is any guide, even the lifeline of bankruptcy may be ill-equipped to give most pandemic-ravaged Black debtors a fresh start, according to a Bloomberg Law analysis. Dozens of academic studies over more than three decades have concluded that Black debtors file for bankruptcy disproportionately more than other racial groups, yet get less permanent relief. A 2017 analysis — co-authored by now-U.S. Rep. Katie Porter (D-Calif.) — found Black filers half as likely as other groups to permanently eliminate their debts, no matter which type of personal bankruptcy case they filed. Now, pandemic-fueled disparate impacts threaten to make relief even more difficult. Although personal filings haven’t spiked, and in fact have dropped since the pandemic began, attorneys expect the reprieve to last only as long as government help. The Black jobless rate was stuck at 14.6 percent in July, despite declining for all other groups and dropping to 10.2 percent overall. Studies have found that the majority of Black Americans seeking personal bankruptcy have chosen to restructure their debts under chapter 13, rather liquidate under chapter 7, even though the latter is used more than twice as often overall. “When you look at the national figures, there’s no question that something is going on,” said John Rao, an attorney at the National Consumer Law Center. “African Americans who have fewer assets and lower income are filing chapter 13s at a higher rate than whites, and that doesn’t make sense.” The Final Report of the American Bankruptcy Institute’s Commission on Consumer Bankruptcy, which devoted a chapter to racial justice in bankruptcy, recommended that Congress authorize collection of race and ethnicity information as part of the petition process.

The U.S. faces a wave of small-business failures this fall if the federal government does not provide a new round of financial assistance — a prospect that economists warn would prolong the recession, slow the recovery and perhaps enduringly reshape the American business landscape, the New York Times reported. As the pandemic drags on, it is threatening even well-established businesses that were financially healthy before the crisis. If they shut down or are severely weakened, it could accelerate corporate consolidation and the dominance of the biggest companies. Tens of thousands of restaurants, bars, retailers and other small businesses have already closed. But many more have survived, buoyed in part by billions of dollars in government assistance to both businesses and their customers. The Paycheck Protection Program provided hundreds of billions in loans and grants to help businesses retain employees and meet other obligations. Billions more went to the unemployed, in a $600 weekly supplement to state jobless benefits, and to many households, through a $1,200 tax rebate — money available to spend at local stores and restaurants. Now that aid is largely gone, even as the economic recovery that took hold in the spring is losing momentum. The fall will bring new challenges: Colder weather will curtail outdoor dining and other weather-dependent adaptations that helped businesses hang on in much of the country, and epidemiologists warn that the winter could bring a surge in coronavirus cases.

The Federal Emergency Management Agency said that 40 states are now signed up to provide their residents with an extra $300 or $400 in unemployment, the New York Times reported. The benefit was originally envisioned by President Trump as an extra $400 to unemployed workers, with the federal government providing $300 and the states providing $100. But states balked at the additional cost, and now the states’ standard unemployment benefit is counted as their contribution. Workers who are not eligible for at least $100 in unemployment will not receive the additional benefit. So far, only three states, Kentucky, Montana and West Virginia, have decided to supply the extra $100. Vermont’s plan to bring the total payment to $400 is awaiting approval from the state’s legislature. South Dakota’s governor has said the state will not apply. That leaves nine other states that have either not applied or have not been approved: Delaware, Illinois, Kansas, Nebraska, New Jersey, Nevada, North Dakota, Wisconsin and South Carolina. Delaware, Illinois, New Jersey, Nevada, North Dakota, South Carolina and Wisconsin say they have applied or will apply. Kansas says that it has applied and intends to supply the extra $100 to bring the total payment to $400. Most states won’t be able to start paying the benefit until mid-September or even October. And the payments are expected to last only four or five weeks.

A new survey released today by Gallup and West Health found that nearly half of Americans in the COVID-19 era fear a health-related incident could drive them into bankruptcy, UPI.com reported. Gallup and West Health said 50 percent of respondents said they're concerned about medical bankruptcy -- a 5 percent increase from early this year, before the pandemic. That concern rose 12 points among U.S. adults between 18 and 29 and non-White Americans. The study found that 15 percent of respondents said at least one person in their home currently has medical debt that will not be repaid in the next 12 months. "Those in households earning less than $40,000 per year are more than four times as likely as those in households earning $100,000 or more to be carrying long-term medical debt (28% vs. 6%, respectively)," Gallup added.