The United States Department of the Treasury has approved California’s plan to provide $1 billion in mortgage relief, clearing the way for the California Mortgage Relief Plan to provide help to as many as 40,000 struggling homeowners, according to a statement from Gov. Gavin Newsom’s office, the Sacramento Bee reported. “We are committed to supporting those hit hardest by the pandemic, and that includes homeowners who have fallen behind on their housing payments,” Newsom said in a statement. “No one should have to live in fear of losing the roof over their head, so we’re stepping up to support struggling homeowners to get them the resources they need to cover past due mortgage payments.” California already has provided renters and landlords with assistance, he noted. “Now, with our California Mortgage Relief Program, we are extending that relief to homeowners,” he said. The program will help homeowners make past due housing payments — to a maximum of $80,000 per household — by making a direct payment to the mortgage servicers.
Kansas officials continue working to speed up the distribution of aid money to help people avoid eviction, the Associated Press reported. More than 40% of the $169 million allocated to the state program has been given out so far, according to Ryan Vincent, executive director of the Kansas Housing Resources Corporation that is overseeing the aid program. Kansas, like most states, fell short of the federal goal of distributing at least 65% of the aid money by Nov. 15, according to the Topeka Capital-Journal. Federal reporting shows only 10 states and the District of Columbia met that target. But Vincent said Kansas has been making steady progress and roughly 32,000 Kansans have received help so far. The amount of aid money the state handed out has more than doubled since late August when it had given out just $31.9 million or about 17% of the total. And Kansas isn’t in danger of having the federal government reclaim some of the money because the state had distributed at least 30% of the aid by the November deadline.
Supply-chain disruptions are threatening to rob some companies of holiday sales, leaving them short on packaging and transportation at a critical time of year, the Wall Street Journal reported. Some makers of toys, games and other consumer goods are racing to figure out how to get products to market, and having to decide which customers will receive orders as stocks run low. In some cases, companies are figuring out how to remake products to have something to sell during a season that can generate a big portion of annual sales. The holiday period is a key season for the U.S. economy, as consumers buy gifts, spend holiday bonuses and stock larders for holiday meals. For some companies, sales across the Thanksgiving-to-New Year’s Day period can make up a large portion of revenue for the year. In 2020, nearly 30% of sales at hobby, toy and game stores occurred in November and December, according to the U.S. Census Bureau, and December was the highest sales month for appliance stores. Companies dealing with wide-ranging supply-chain disruptions –– including backlogged ports, scarce materials and components, and too few workers to staff production lines and drive trucks –– said that some of their 2021 holiday sales are likely lost for good. The problems could also weigh on future sales: Some executives said their companies risk reputational harm if they aren’t able to deliver products on time, or at all. In response, businesses are adding shifts, finding new suppliers and taking other steps to ensure their products get to customers and under Christmas trees in the final days of the 2021 season.
The Archdiocese of Santa Fe’s (N.M.) chapter 11 bankruptcy efforts have plodded along for three years with no end visible in the case involving more than 400 clergy abuse victims, Santa Fe Mexican reported. Lawyers say three years is a comparatively long time for chapter 11 proceedings but is far from unheard of. It’s in everyone’s interests — the archdiocese’s and the victims’ — to resolve it through chapter 11, attorneys say. Therefore, an eventual settlement is still expected. “The alternatives are so bad that it’s worth it to stay in the game,” Laura Coordes, associate professor of law at Arizona State University, said of chapter 11. The archdiocese seeks to raise an adequate sum, through property sales, donations and insurance, to reach settlements with the victims. In a blog this month, Archbishop John Wester wrote: “We knew when we filed for chapter 11 that it would not be easy. We are making progress, albeit slow progress. Please pray that this arduous and drawn-out process will bring healing to the victims of sexual abuse, to their families, our parishes and this local Church.” Coordes and Albuquerque bankruptcy attorney Dave Giddens said the alternatives to a settlement typically would be for the case to be converted to chapter 7 bankruptcy, in which a trustee would call the shots on the sale of assets. Or the case could be dismissed, and many victims then would file lawsuits individually.
Philippine Airlines Inc. won court approval for its reorganisation plan, paving the way for the carrier to exit bankruptcy, cut $2 billion in debt and revive its fortunes after a slump in international travel due to the pandemic, Bloomberg News reported. Bankruptcy Judge Shelley Chapman in Manhattan said on Friday that she would approve the chapter 11 plan after unsecured creditors voted to back the proposal. The reorganization didn’t face any major opposition from debt holders. "This case is a model for what can be accomplished in chapter 11,” Chapman said. "You’ve achieved overwhelming consensus.” The company will try implement the plan and exit bankruptcy by the end of the year, if it is able to get approval from securities regulators in the Philippines, a lawyer for the airline said during the court hearing on Friday. The flagship carrier, majority owned by billionaire Lucio Tan, is one of several to enter debt restructuring in the U.S., which companies often consider a preferred location. Aeromexico and Colombia’s Avianca Holdings sought court protection in New York last year. Philippine Airlines already got a green light to access $505 million worth of equity and debt financing to help it meet its obligations. As part of the turnaround, it plans to reduce the size of its fleet.
One of the world’s largest aircraft leasing company filed for chapter 11 as it seeks to restructure its finances for the second time since the beginning of the pandemic. Denmark-based Nordic Aviation Capital A/S sought bankruptcy protection to overhaul about $6 billion of debt, Bloomberg News reported. On Sept. 24, the company reached an agreement in principle with creditors to fix its balance sheet. The company listed both assets and debt of between $1 billion and $10 billion, according to court papers filed in U.S. Bankruptcy Court in Richmond, Virginia. The restructuring framework includes the conversion of “a substantial amount of the group’s debt into equity,” a $300 million equity rights offering and a $200 million revolving credit facility, the company said. Silver Point Capital and Sculptor Capital Management are set to take control of the company as part of the deal, people familiar with the matter said on Sept. 30.
A U.S. appeals court on Friday reinstated a nationwide vaccine-or-testing COVID-19 mandate for large businesses, which covers 80 million American workers, prompting opponents to rush to the Supreme Court to ask it to intervene, Reuters reported. The ruling by the U.S. Court of Appeals for the Sixth Circuit lifted a November injunction that had blocked the rule from the Occupational Safety and Health Administration (OSHA), which applies to businesses with at least 100 workers. "It is difficult to imagine what more OSHA could do or rely on to justify its finding that workers face a grave danger in the workplace," said the opinion. "It is not appropriate to second-guess that agency determination considering the substantial evidence, including many peer-reviewed scientific studies, on which it relied." President Joe Biden unveiled in September regulations to increase the adult vaccination rate as a way of fighting the pandemic, which has killed more than 750,000 Americans and weighed on the economy. The ruling coincides with public health officials bracing for a "tidal wave" of coronavirus infections in the United States as the more transmissible Omicron variant spreads rapidly worldwide. "While we are disappointed in the Court’s decision, we will continue to fight the illegal mandate in the Supreme Court," South Carolina Attorney General Alan Wilson said on Twitter. "We are confident the mandate can be stopped." Within hours of the ruling, at least three petitions were filed with the U.S. Supreme Court, asking it to immediately block the mandate. Read more.
In related news, the Labor Department has delayed until Feb. 9 the deadline for full enforcement of its rule requiring large companies to have their workers get coronavirus vaccines or be tested weekly, after weeks of legal battles created uncertainty and confusion for employers, the New York Times reported. The department’s move came on Saturday, a day after a federal appeals panel reinstated the Biden administration's rule requiring that companies with at least 100 employees mandate their workers be vaccinated against the coronavirus or face weekly testing by Jan. 4. The rule had also mandated that those employers require masks for unvaccinated workers by Dec. 5. Read more.
Latam Airlines Group SA’s official low-ranking creditor group is unhappy with the Chilean carrier’s bankruptcy exit proposal, arguing a sale to rival Azul SA could leave its members much better off, Bloomberg News reported. In court papers filed on Wednesday, Santiago-based Latam’s unsecured creditor committee said the airline’s current reorganization plan is so unfair that it can’t win court approval. It flouts U.S. bankruptcy rules by favoring some evenly-ranked creditors over others and giving value to shareholders that don’t deserve it, lawyers for the group wrote. “Rather than use the past eighteen months to negotiate and prepare a value-maximizing plan that treats all constituents fairly and in accordance with the Bankruptcy Code, the Debtors have used their exclusive opportunity to negotiate an unconfirmable insider deal at the expense of non-preferred creditors,” lawyers from the Dechert firm wrote on behalf of unsecured creditors. Under the current proposal, Latam locked arms with key shareholders — Delta Air Lines Inc., Qatar Airways and Chile’s Cueto family — and a major creditor group on a deal that would raise about $5 billion and slash its debt load. Sixth Street Partners, Sculptor Capital and SVPGlobal are leading the creditor group that has agreed to backstop the plan. The plan would result in creditors taking control of the company, while existing shareholders could retain a sizable ownership stake. That’s unusual in U.S. bankruptcy — stockholders are last in line to be repaid — but Latam’s deal would smooth over potentially thorny Chilean securities law issues.
