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Virgin Atlantic Airways Ltd. is set to find out whether it has enough support from creditors for a 1.2 billion-pound ($1.6 billion) rescue or if it will need a judge to overrule them in order to stave off collapse, Bloomberg News reported. The U.K. carrier founded and controlled by billionaire Richard Branson has already secured the backing of three creditor classes and is now seeking approval from the fourth, comprising trade suppliers, in a vote yesterday. Support from the suppliers would eliminate the last potential obstacle to Virgin’s proposal ahead of a legal hearing next week. Should the creditors vote against the plan, the airline will have to persuade a judge, who under a new U.K. procedure can rule that a restructuring is preferable to insolvency even without the support of all relevant parties. The 36-year-old airline, which operates a fleet of 40 wide-body planes, reiterated that it remains “confident in the plan” and that it will be signed off. Virgin saw demand cut to a quarter of 2019 levels in the first half of the year as the coronavirus pandemic brought travel to a near standstill. It employs 6,500 people after slashing more than 30 percent of its staff, part of an airline worker toll of about 75,000 across Europe.

Retail landlords are including pandemic language in new leases, a previously rare feature as tenants seek protection after the first government-mandated coronavirus shutdowns in March complicated their negotiations for rent relief, the Wall Street Journal reported. Because many insurance policies didn’t cover pandemic-related losses, landlords have offered various concessions to attract and retain tenants, including allowing them to defer part of their rent if another shutdown is ordered. Both sides get breathing room: Tenants are able to lower expenses while landlords are still able to collect some money for overhead and their mortgage. “You have to provide the tenant an easy decision. If you make it complicated, you’re not going to get this done,” said Philippe Lanier, principal at EastBanc, a property developer, owner and manager of 25 open-air retail properties in Washington, D.C.’s Georgetown neighborhood. Lanier has offered to cut the minimum base rent to 50 percent if the District of Columbia prohibits tenants from operating their business again because of the coronavirus, and for the tenant to repay the difference in six equal monthly installments on the first day after reopening. He also is open to leases structured on a percentage of the retailer’s sales—“percentage rents”—which would limit tenants’ expenses if their sales decline. He said he had signed amended leases with around 30 retail tenants, with an additional 15 still in the works. Real-estate brokers said that landlords have to contend with a glut of stores and social-distancing measures that have forced many retailers to shrink the number of stores. The trend puts more bargaining power in the hands of tenants such as restaurants, apparel retailers, grocery stores and discount stores that are still expanding. “We have begun to clarify and strengthen some of our force majeure language to more clearly define governmental shutdown, et cetera, which could happen for a multitude of reasons,” said Josh Goldstein, director of real estate and store development at Pet Supplies Plus, referring to “act of God” clauses that allow tenants to terminate leases or reduce rents in extraordinary circumstances. Questions remain about how long Covid-19 will persist, and some businesses are wary about the recent resurgence in infections in California, Texas and Florida. Landlords have extended more relief to tenants such as small local and regional apparel retailers, salons and restaurants that have felt the most pain. They also said they anticipate more tenant bankruptcies.

The parent of Kings Food Markets and Balducci’s has filed for bankruptcy, as a sales boost amid the Covid-19 pandemic wasn’t enough to overcome years of pressure from big national chains, online retailers and meal-kit companies, WSJ Pro Bankruptcy reported. KB US Holdings Inc. sought chapter 11 protection on Sunday in U.S. Bankruptcy Court in White Plains, N.Y., with a $75 million buyout offer from New York investment firm TLI Bedrock LLC. The grocer, which purchased Balducci’s in 2009, operates 35 supermarkets—25 Kings and 10 Balducci’s—in New York, New Jersey, Connecticut, Virginia and Maryland, and employs more than 2,100 people. Sales at big supermarkets have surged during the coronavirus pandemic, with shoppers stocking up on everything from bread to toilet paper. But for Kings and Balducci’s, the boost was too little, too late. “While the increase in sales during the Covid-19 pandemic has provided KB with a brief respite from its liquidity challenges, the debtors recognize that the pandemic will not persist indefinitely and has created uncertain and unprecedented circumstances,” said restructuring specialist M. Benjamin Jones in a declaration filed with the court. Before the pandemic, KB experienced “historically low” earnings, which the company blamed in court papers on competitive pressures and labor costs—a portion of the chain’s workforce is unionized—and pension obligations. Those pressures have significantly pinched the chain’s liquidity and cash flow, Jones said, causing it to default on $114 million in senior debt and to put off investments in store renovations.

America’s economic recovery is in an uneasy pause, with key indicators of hiring, shopping and investment stalling or in retreat in the wake of a resurgence in coronavirus cases across broad sections of the country, and with Congress and President Trump showing no signs of progress on another stimulus deal, the New York Times reported. Real-time measures of consumer spending, business sentiment, small-business reopening plans and even available jobs began flatlining last month, suggesting that the wave of virus infections that swept across parts of the U.S. in June and July came with economic consequences. Small-business data from the time management firm Homebase shows no improvement since the middle of the summer in employment or hours worked in crucial parts of the economy. Job postings from the online recruiting site Indeed slipped backward this week for the first time since May. Now, key policy supports that included a $600-per-week unemployment insurance expansion have begun to lapse. Congress appears unlikely to pick up negotiations on a new relief package until September, and analysts are increasingly accounting for the possibility that lawmakers will fail to strike a deal before the November election. By that point, with the changing weather pushing many people back inside, public health officials fear a new wave of coronavirus infections. Those twin risks — the path of the coronavirus and waning policy support — loom over the country’s fledgling recovery when the economy has yet to recover about 60 percent of the jobs lost since the start of the pandemic. More than half of those who are still out of work say they never expect to go back to their old jobs, according to polling from the online research firm SurveyMonkey.

Long-term unemployment helped define the Great Recession. Countless networks, relationships and skills that bound employee to employer were ripped apart in the global financial crisis. It took about eight years for the unemployment rate to recover from that dislocation. Now economists fear it’s happening all over again, according to a Washington Post analysis. The devastating surge in unemployment in March and April was supposed to be temporary, as businesses shuttered to avert the greatest public health crisis in more than a century. Most workers reported they expected to be called back soon. But nearly half a year later, many of the jobs that were stuck in purgatory are being lost forever. About 33 percent of the employees put on furlough in March were laid off for good by July, according to Gusto, a payroll and benefits firm whose clients include small businesses in all 50 states and D.C. Only 37 percent have been called back to their previous employer. There were 3.7 million U.S. unemployed who had permanently lost their previous job as of July, according to the Labor Department. That figure doubled from February to June, held steady in July, and is expected to hit between 6.2 million and 8.7 million by late this year, according to a new analysis from economists Gabriel Chodorow-Reich of Harvard University and John Coglianese of the Federal Reserve Board.

Long-term unemployment helped define the Great Recession. Countless networks, relationships and skills that bound employee to employer were ripped apart in the global financial crisis. It took about eight years for the unemployment rate to recover from that dislocation. Now economists fear it’s happening all over again, according to a Washington Post analysis. The devastating surge in unemployment in March and April was supposed to be temporary, as businesses shuttered to avert the greatest public health crisis in more than a century. Most workers reported they expected to be called back soon. But nearly half a year later, many of the jobs that were stuck in purgatory are being lost forever. About 33 percent of the employees put on furlough in March were laid off for good by July, according to Gusto, a payroll and benefits firm whose clients include small businesses in all 50 states and D.C. Only 37 percent have been called back to their previous employer. There were 3.7 million U.S. unemployed who had permanently lost their previous job as of July, according to the Labor Department. That figure doubled from February to June, held steady in July, and is expected to hit between 6.2 million and 8.7 million by late this year, according to a new analysis from economists Gabriel Chodorow-Reich of Harvard University and John Coglianese of the Federal Reserve Board.

A watchdog panel of government inspectors general is asking the Small Business Administration to provide the names of borrowers who received Paycheck Protection Program loans of $25,000 and up, citing a 2006 law that requires their disclosure, the Wall Street Journal reported. The request is being made by the Pandemic Response Accountability Committee, a panel of inspectors general from across the government that is responsible for ensuring relief funds appropriated under the $2 trillion Cares Act and other pandemic relief measures are being spent appropriately. The 2006 Federal Funding Accountability and Transparency Act says that loans, grants, contracts and other forms of federal financial assistance totaling $25,000 or more must be disclosed on a publicly searchable website, USASpending.gov. The disclosures must include the name of the entity receiving the award, the amount of the award and other relevant details. “Once the PRAC learned in late July that PPP information was not included in the USASpending data, we formally requested full and ongoing access to this data from the SBA Administrator,“ said Robert Westbrooks, the committee’s executive director. "The PRAC requires complete PPP information to meet its reporting responsibilities under the Cares Act and to ensure transparency of coronavirus emergency spending.” The SBA contends that disclosing the names of loan recipients could violate their privacy because PPP loans are scaled to the size of a business’s payroll. “SBA is acting, consistent with legal requirements, to protect this sensitive information for small businesses,” the agency said. But advocates for disclosure say that it is important to gauge the program’s effectiveness. Publicly traded companies, big law firms, government contractors with steady incomes, companies accused of fraud, private-equity firms, hedge funds and luxury real-estate developers all participated in the program aimed at struggling small businesses. The scrutiny has led some companies to give back the money.

The Federal Reserve has used only a fraction of the $600 billion in an emergency lending program for small and medium businesses struggling with the Covid pandemic, according to a congressional watchdog report, Bloomberg News reported. Eligible lenders participating in the Main Street program have issued $496.8 million in loans, of which $472 million is Federal Reserve money, or about 0.07 percent of the central bank’s lending capacity as of Wednesday, according to the report issued on Friday. “The Main Street Lending Program has seen modest initial activity thus far,” according to a monthly report from the Congressional Oversight Commission, the panel in charge of overseeing the Treasury Department and Federal Reserve responses to the coronavirus pandemic. “Some of the Main Street Lending Program’s modest activity may be because some businesses accessed the Small Business Administration’s (SBA) Paycheck Protection Program (PPP), while others are able to rely on existing credit lines or other sources of liquidity,” the report said. The watchdog panel noted several other reasons why businesses may not be seeking the funding: only 160 of the 522 lenders registered with the program have publicized that they are accepting loan applications with new customers; businesses are unfamiliar with the program; and that the eligibility rules are complex and may exclude some businesses that wish to participate. The report also noted that it took the Fed months to launch the lending facilities, which could be dampening demand. In April, the central bank said that it would also lend to non-profit organizations but those programs have yet to be launched. The Fed has defended the lending levels for Main Street program, saying that there isn’t huge demand for loans currently but that it could consider re-evaluating the eligibility requirements as conditions change. Boston Fed President Eric Rosengren, whose bank manages the lending facility, told the panel earlier this month that the program will likely see more demand from small and mid-size businesses if the pandemic continues dragging down the economy. The program buys up to 95 percent of individual loans made under it by private banks to businesses.

TNT Crane & Rigging Inc. has filed for bankruptcy protection with votes of support in hand for a balance-sheet reshaping designed to preserve the business in the face of disruption from the Covid-19 pandemic, WSJ Pro Bankruptcy reported. The Houston-based company was thriving when Russia’s oil price war with Saudi Arabia and the pandemic slammed its clients in the hard-hit oil-and-gas sector, Chief Executive Michael Appling said in court papers. TNT is pivoting away from energy customers, and moving into or expanding other construction and industrial markets, with its business of providing cranes, engineering and operators. Suppliers, employees and other unsecured creditors won’t be affected by the bankruptcy. On the financial front, the crane company was facing looming maturities within months on $466 million of its $666 million in funded debt. TNT’s capital structure was created in 2013, when it was acquired by First Reserve Corp., a private-equity firm. Talks with leading creditors were successful, and TNT arrived in bankruptcy having already counted the ballots from lenders, including First Reserve, to get it swiftly through and out of chapter 11. Bankruptcy will cost First Reserve its ownership stake in the company, which is teed up for a takeover by first-lien lenders, according to court papers. Much of the debt dates back to First Reserve’s acquisition of the company.