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When Brooks Brothers filed for bankruptcy last month, court filings showed it owed as much as $1 billion to thousands of creditors, including $10 million to one of its biggest landlords: Simon Property Group. Now the nation’s premier mall operator is also its owner, the Washington Post reported. In recent weeks, Indiana-based Simon snapped up bankrupt retailers Brooks Brothers and Lucky Brand, and bid on another, J.C. Penney. It also is reportedly in talks with Amazon to turn space once filled by Sears and other department stores into e-commerce warehouses. Analysts say the succession of deals gives Simon a roster of iconic brands for rock-bottom prices and steady rent. Others see an act of desperation that will only delay the inevitable demise of dozens of flailing malls across the country. The company’s foray from landlord to owner shows just how deeply the coronavirus crisis has reshaped the retail industry. Like many of its peers, Simon temporarily shut all 175 of its U.S. malls and outlets in March, and was reported to have furloughed about 30 percent of its workforce. It delayed more than $1 billion in redevelopments. Major tenants like the Gap stopped paying rent, while others began pulling out of leases. Apparel chain Abercrombie & Fitch, meanwhile, is suing Simon, alleging that it “wrongfully extracted rent payments” during the pandemic. In all, Simon collected about 51 percent of retailers’ rent payments in April and May, and about 70 percent in June and July, executives said on an earnings call this month. Now the company is investing millions to prop up some failing retailers, in hopes of keeping occupancy rates up and rent payments coming in.

An upscale Miami-area shopping mall is moving to evict Saks Fifth Avenue, saying the retailer hasn’t paid rent since March 16 and owes about $1.9 million, Bloomberg News reported. Saks told its landlord, Bal Harbour Shops LLC, this month that it couldn’t make lease payments on its three-level retail store due to the effects of the Covid-19 pandemic, according to a lawsuit filed in state court. But the mall owner said that Saks is currently open and was still generating revenue even when non-essential businesses were closed to in-store customers. Bal Harbour said that the store generated more revenue in June 2020 than it did in the same month the previous year. Saks Fifth Avenue, owned by Canadian parent Hudson’s Bay Co., is among a broad group of businesses that have been hurt by economic lockdowns and a rapid change of consumer tendencies amid the global pandemic. In a statement, Saks Fifth Avenue said that the owners of Bal Harbour “have not acted in good faith,” unlike “the majority of our landlord partners.” Read more. 

Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store.

White House Chief of Staff Mark Meadows said yesterday that he is not optimistic about reaching a new coronavirus relief deal before the end of September, predicting House Speaker Nancy Pelosi will use the government funding cliff at the end of next month as leverage to strike a deal on pandemic aid, Politico reported. Meadows said his staff had reached out to Pelosi's office on Tuesday but added that he does not anticipate a response. The White House chief of staff said that lawmakers from both parties have privately expressed to him a desire to make progress on coronavirus relief. The hold up, Meadows said he suspects, is that Pelosi is holding back her party's rank and file in order to secure more Democratic priorities in any legislation. "It's really been Speaker Pelosi really driving this train as a conductor more so than really anybody," Meadows said. "And I think privately she says she wants a deal and publicly she says she wants a deal, but when it comes to dealing with Republicans and the administration, we haven't seen a lot of action." Pelosi spokesman Drew Hammill told Politico that a member of Meadows' staff texted the speaker's staff to confirm they had the correct number for the chief of staff, but did not mention resuming talks. Meadows also said he would call Pelosi during an interview on ABC News on Sunday, but Hammill said he never did.

President Donald Trump is weighing executive action to avoid massive layoffs at U.S. airlines if Congress fails to agree a fresh coronavirus stimulus package, White House Chief of Staff Mark Meadows said yesterday, Reuters reported. His remarks came a day after American Airlines said its workforce will shrink by 40,000, including 19,000 involuntary cuts, in October without an extension of government aid as the pandemic continues to devastate travel demand. U.S. airlines received $25 billion in payroll aid under the CARES Act to protect jobs through October and the industry has lobbied for another $25 billion to keep workers employed through March, when they hope travel demand will be stronger. Meadows said he had spoken with officials from American, as well as from United Airlines and Delta Air Lines. “We will continue to work with the administration and our bipartisan supporters in Congress and hope to come to a resolution in a timely fashion,” American said in a statement. United has warned that 36,000 jobs are at risk. Delta said Monday that it would furlough 1,941 pilots but has not detailed cuts across other employee groups.

Laura intensified into a strong Category 4 hurricane yesterday as it raced over evacuated oil production platforms in the U.S. Gulf of Mexico and took aim at the energy industry’s refining hub along the Texas/Louisiana coast, Reuters reported. The storm gathered strength on Wednesday and is forecast to bring heavy rains and catastrophic, 150 mile-per-hour (240 kph) winds that will drive ocean waters up to 40 miles (64 km) inland, U.S. forecasters said in a late-day advisory. More than 600,000 people in the two states fled the storm, clogging highways and filled hotels in a rush to avoid the storm and shelters. Both states secured hotel rooms for evacuees and warned residents to avoid traveling overnight. Landfall is expected at about midnight and could push an “unsurvivable” 20-foot wall of water against the coast south of Lake Charles, Louisiana, the National Hurricane Center warned. The storm’s track and power resembles 2005’s Hurricane Rita, which caused more than $18 billion in damages and killed more than 120 people, many during a hurried Texas evacuation.

Delta Air Lines is facing a fresh Latin American headache as a Monday deadline nears for former Brazilian partner Gol Linhas Aereas Inteligentes to repay a $300 million loan that the U.S. carrier guaranteed, Reuters reported. If Gol fails to repay — which ratings agencies say is looking more likely — Delta would have to honor the debt on Gol's behalf, honoring the five-year-old agreement. But just like Gol, the Atlanta-based carrier, which said in July it was burning $27 million a day here has little cash to spare due to the coronavirus pandemic. Gol’s struggles are just the latest challenge for Delta, whose investments in Latin America, once seen as a growth area, have faltered due to COVID-19. Delta's 49 percent stake in Aeromexico and 20 percent stake in LATAM Airlines Group are at risk of dilution or being wiped here out as both airlines undergo bankruptcy restructurings. For Gol, Brazil’s largest carrier, the due date of the Delta-backed private loan comes amid a severe cash crunch. The loan was extended by unidentified private investors. By Monday, before repaying the loan, Gol could have just 1.6 billion reais ($285.19 million) left in cash, Reuters calculated. The calculation is based on Gol’s cash and cash equivalents, as well as its liquid investments, as of June 30, minus its expected cash burn of 3 million reais a day.