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Some members of the Senate Finance Committee are studying a proposal that would allow corporations to claim a bevy of federal tax credits in 2020 that they would otherwise be ineligible to receive until future years, the Washington Post reported. Powerful members of Washington’s business lobby, including the National Association of Manufacturers and the U.S. Chamber of Commerce, are asking lawmakers to include the tax change in the next congressional legislation being taken up to combat the virus. Under current law, corporations are generally not allowed to claim federal tax credits if the credits exceed their overall tax liability, meaning they cannot receive more from the government than they pay in. If corporations cannot claim their federal tax credits, they can roll them into future years. The proposal being discussed by several Republicans on the Senate Finance Committee would void that limit, allowing firms to “cash out” on all their credits this year. The emerging tax proposal comes amid intensifying jockeying among special interest groups and congressional lawmakers over the next round of congressional stimulus, which could be as large as $1 trillion. The White House, congressional Republicans and business groups have also pushed aggressively for a “liability shield” that would insulate firms from lawsuits from customers or employees who develop Covid-19, the disease caused by the novel coronavirus, but Democrats have rejected that proposal as a non-starter.

Extraction Oil & Gas Inc. filed for bankruptcy, becoming the latest producer to succumb to high debt and dwindling liquidity amid a difficult environment for energy companies, Bloomberg News reported. The Denver-based company filed in Delaware after skipping a May 15 interest payment on its 2024 bonds, triggering a 30-day grace period while it explored strategic options to address its roughly $1.5 billion of debt. Its bankruptcy filing follows a collapse in oil prices to historic lows as the coronavirus pandemic slashed demand, and Saudi Arabia and Russia competed for market share. Extraction withdrew its 2020 guidance in May and warned it may have to file for bankruptcy. More than 200 North American producers have filed for chapter 11 since the beginning of 2015, according to a May report from law firm Haynes & Boone.

E-learning company Skillsoft Corp. said today that it filed for pre-packaged chapter 11 protection to reduce its debt of about $2 billion, Reuters reported. The company said that it had agreed to a restructuring agreement with a majority of its lenders that would help it cut its debt to $410 million. Skillsoft filed for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware, where it listed both assets and liabilities in the range of $1 billion to $10 billion. Skillsoft expects to have liquidity of about $50 million after the restructuring and anticipates emerging from chapter 11 on an “expedited basis.” The company does not expect employees to be affected as a direct result of the restructuring, Skillsoft said. It also expects to continue operating during and following the restructuring process, without material disruption to its vendors, partners and employees, according to the statement. The e-learning company, which serves about 65 percent of the companies in the Fortune 500, was acquired by European buyout firm Charterhouse Capital Partners LLP in 2014.

24 Hour Fitness Worldwide Inc. sought court protection from its creditors, unable to keep up with debt payments after the prolonged shutdown caused by coronavirus outbreak, Bloomberg News reported. The fitness chain’s chapter 11 petition was filed in Delaware, court papers show. Even before the onslaught of the coronavirus, middle-tier operators like 24 Hour struggled with customer defections to higher-end or budget-friendly fitness options. The gym operator posted a 2 percent revenue decline in unaudited fourth-quarter earnings, Bloomberg reported. Privately held 24 Hour, with more than 430 clubs and based in San Ramon, Calif., reported a slide in 2019 earnings partly due to the rocky debut of an automated system for checking in and signing up customers. Memberships at the company fell to 3.4 million in 2019’s third quarter from 3.5 million in the second quarter, according to Moody’s Investors Service. Chief Executive Officer Tony Ueber had to close all of the chain’s gyms in the middle of March, in line with other businesses across the U.S., to stop the spread of the virus. The company fully drew its $120 million credit line to cope with the expected impact of the pandemic. Management had been in talks with creditors to rework its debt load, but negotiations ended in a stalemate around the time of the closures, 24 Hour Fitness said in a March 23 earnings report.

Another icon of luxury goods and Wall Street culture may be headed for the bankruptcy auction block, with Authentic Brands Group LLC and mall landlord Simon Property Group Inc. in talks to buy Brooks Brothers Inc., Bloomberg News reported. Authentic and Simon would team up to bid for the two-century-old chain after a potential chapter 11 filing by the retailer. Authentic has a history of buying well-known brands that have fallen on hard times, and Simon, the nation’s biggest mall landlord, has a stake in keeping its prime tenants in business. It’s been a tough few years for high-end goods, even before the Covid-19 outbreak forced Brooks Brothers to temporarily close its stores. Retailers including Barney’s New York Inc., Neiman Marcus Group Inc. and Dean & DeLuca have gone bust as shoppers shunned malls in favor of online outlets. “These aspirational-type brands can expect a bumpy year ahead,” said Bloomberg Intelligence analyst Deborah Aitken, who monitors the luxury market. The Brooks Brothers brand hasn’t made “enough of a transition to leisure, street and athletic wear.” Relaxed dress codes also hurt Brooks Brothers, with suits and ties no longer the standard even at blue-chip corporate offices, top Wall Street brokerages and white-shoe law firms where Brooks Brothers clothing was once a status symbol. It didn’t help that the pandemic pushed would-be customers to work from home and forced the cancellation of weddings and other formal events, cutting down on demand for new clothing.

Auto makers are grappling with absent U.S. factory workers and Covid-19 cases at their reopened plants, complicating the companies’ efforts to recoup production lost to the pandemic, the Wall Street Journal reported. The impact on output has been minimal as many plants aren’t yet operating at full capacity, the companies said. Still, the challenges have required auto makers to adjust shifts and add temporary workers. Such moves highlight the complexities businesses face upon reopening as they look to insulate their workplaces from potential outbreaks while restoring moneymaking operations after weeks of lockdown. At major vehicle-assembly plants around the country, the number of workers calling out is running above normal, according to union officials representing the plants. Also, some employees have asked for work stoppages because of coronavirus concerns.

U.S. nonfinancial business debt soared in the first quarter by the most since records were first kept in 1952, as bank loans and corporate bond issuance jumped in companies’ all-out effort to stay liquid during the coronavirus pandemic, Bloomberg News reported. Firms boosted debt by $754.8 billion, or at an 18.8 percent annualized rate, in the first quarter to a total outstanding $16.8 trillion that surpassed the level of household borrowing, according to a Federal Reserve report released yesterday. At the same time, household net worth fell the most on record — to $110.8 trillion from $117.3 trillion — as stock prices collapsed in February and March amid fears of the coronavirus. Federal government debt surged an annualized 14.3 percent. Corporate bond issuance jumped a record annualized $682.1 billion from the fourth quarter while loans soared $2.3 trillion, as companies tapped credit to withstand a collapse in global demand, the interruption of supply chains and widespread economic uncertainty. Loans from depository institutions surged an annualized $1.6 trillion.

U.S. property and casualty insurers have cast the coronavirus pandemic as an unprecedented event whose massive cost to small businesses they are neither able nor required to cover, Reuters reported. The industry has warned it could cost them $255 billion to $431 billion a month if they are required, as some states are proposing, to compensate firms for income lost and expenses owed due to virus-led shutdowns, an amount it says would make insurers insolvent. The estimate, made by the American Property Casualty Insurance Association (APCIA), a trade group, was recently used by the industry to successfully lobby against state and city lawmakers’ efforts to legislate to make the sector pay. Insurers say business interruption policies only apply when actual physical property damage prevents a business from operating and any attempt to apply cover beyond that, for a pandemic, are unconstitutional. The stance has discouraged some policyholders from filing claims and prompted others to take legal action. A Reuters examination of APCIA’s estimate, however, suggests the possible bill may not be so onerous. The APCIA estimate is an industry worst-case scenario based on all small firms with business interruption coverage being able to claim. It also assumes that between 60% and 90% of businesses with fewer than 100 employees will be impacted by Covid-19. Only about 40 percent of small firms have business interruption coverage, according to the Insurance Information Institute, and most of the policies explicitly exclude pandemics, according to Tyler Leverty and Lawrence Powell, professors who specialize in insurance at the University of Wisconsin and the University of Alabama, respectively. Powell has estimated that insurers could be on the hook for a maximum of $120 billion a month in claims on the basis that half of small firms have business interruption insurance.

Hertz Global Holdings Inc. is asking a bankruptcy judge to let it take advantage of the quixotic surge in its stock by selling up to $1 billion of new shares, Bloomberg News. Stocks of bankrupt companies typically get wiped out, but after an enormous two-week rally, the car rental giant envisions offering as many as 246.78 million common shares with help from Jefferies LLC, according to a court filing. Judge Mary Walrath set a hearing for today to consider the idea. Investors are bidding up Hertz and other bankrupt companies on optimism that the economy and specifically air travel is poised to rebound. Hertz might also benefit from prices of used cars at auctions coming all the way back from a mid-April collapse. Hertz based its request to the court on a nearly tenfold increase in its stock from 56 cents on May 26 to $5.53 on Monday, according to the filing. While the stock has slid to less than half that level, Hertz said a sale of its unissued shares still could help cover its debts. “The recent market prices of and the trading volumes in Hertz’s common stock potentially present a unique opportunity for the debtors to raise capital on terms that are far superior to any debtor-in-possession financing,” the company said, referring to a traditional bankruptcy loan. A share offering would avoid new interest, fees and restrictions on Hertz’s finances and wouldn’t impose any claims from a bankruptcy loan that would outrank existing creditors, the company said. Hertz said it would warn any potential buyers “the common stock could ultimately be worthless.”

Authentic Brands Group LLC and mall landlord Simon Property Group Inc. are in talks over a joint bid to buy Brooks Brothers Inc. as part of a bankruptcy reorganization of the men’s clothing retailer, Bloomberg News reported. Authentic and Simon, which have teamed up before on deals for Forever 21 Inc. and Aeropostale Inc., is in discussions with Brooks Brothers to buy it in a court-supervised sale after a chapter 11 filing being contemplated by the retailer. The two-century-old menswear company has been seeking buyers as many of its stores struggle, even before the Covid-19 pandemic that shuttered retailers nationwide, Bloomberg News reported last month. Authentic Brands, which owns fashion, celebrity and media brands, has been snapping up distressed retailers in the past year. In addition to Forever 21, it bought Barneys New York Inc. out of bankruptcy. Mall operators like Simon, meanwhile, have been stepping up their involvement following a wave of store closings and bankruptcies. Brookfield, the second-largest U.S. mall operator after Simon, created a $5 billion fund this year to buy stakes in retailers.