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Candy retailer It'Sugar is slated to emerge from bankruptcy after nearly nine months of court proceedings, the South Florida Business Journal reported. The Deerfield Beach, Fla.-based chain is expected to finalize its chapter 11 reorganization process by the end of July, according to a statement from the company. When it does so, Fort Lauderdale-based BBX Capital will reacquire control of It'Sugar. The retailer had become its own entity when BBX restructured last year. It'Sugar filed for chapter 11 protection in September. At the time, BBX Capital said that the COVID-19 pandemic was to blame for It'Sugar's financial struggles. BBX Capital President Jarett Levan said tourism historically accounted for 60% of It'Sugar's annual sales and, at that point in the pandemic, travel was still at historic lows nationwide. On June 11, the U.S. Bankruptcy Court for the Southern District of Florida announced its intention to confirm It'Sugar's reorganization plan, according to the company. The confirmation order is expected to become final within a week, which will allow It'Sugar to officially emerge from bankruptcy proceedings after 30 days.

A Chinese man who prosecutors say tried to get $20 million in federal aid for distressed businesses pleaded guilty Tuesday to two criminal charges, the Associated Press reported. Muge Ma entered the plea in Manhattan federal court to bank fraud and aggravated identity theft, admitting the fraud that authorities say he carried out from his luxury Manhattan condominium. Judge Richard M. Berman noted that it was the first hearing conducted in his courtroom since the coronavirus forced a shutdown of most in-court proceedings in March 2020. Ma has remained incarcerated as a flight risk since his May 2020 arrest, when prosecutors said he had applied to at least five banks for over $20 million in government-guaranteed loans from the Paycheck Protection Program and the Economic Injury Disaster Loan program. The programs were intended for businesses harmed by coronavirus shutdowns. Authorities said he falsely claimed to be paying hundreds of employees millions of dollars in wages through two companies he controlled. To support the claims, he submitted fraudulent bank, tax, insurance and payroll records and provided banks with links to websites that described the companies as “global,” prosecutors said.

A particular hope filled the air (or at least social media) after Biden’s swearing in — the hope that student loan debt would be cancelled. Six months later, however, there are no clear signs this is happening, according to a Bloomberg News commentary. Even the $10,000 student loan debt cancellation Biden himself advocated prior to his election has yet to come to fruition. This matters because more than 40 million Americans are on borrowed time before having to resume payments on federal student loans. On March 27, 2020 the CARES Act suspended payments and collections on defaulted student loans, and brought interest rates down to 0% until Sept. 30, 2020. After a few extensions, this is set to expire on Sept. 30 of this year. The relief has been critical for millions during the pandemic, but it’s cost the U.S. government an estimated $53 billion, according to the administration’s recent proposed budget. It’s predicted to result in $68 billion in long-term losses, due to factors such as increased enrollment in income-driven repayment plans and potential defaults. The reality is, the federal government is not going to cancel the more than $1.7 trillion in student loan debt, according to the commentary. At some point, borrowers will have to start making regular payments and see interest accrue on what they owe.

Shoppers likely pulled back on auto purchases last month while boosting spending on other items and at restaurants, as more people got vaccinated against COVID-19 and business restrictions were further eased, the Wall Street Journal reported. Economists estimate that Tuesday’s Commerce Department report will show that overall retail sales declined 0.6% in May. They expect that sales excluding autos rose a solid 0.5% from a month earlier. Stronger overall spending is helping propel the broader U.S. economy, which grew at a 6.4% annual rate in the first quarter. Economists project that by the end of this year gross domestic product will reach the path it was projected to follow had the pandemic never happened — and then exceed it, at least temporarily. Vehicles, however, are in short supply as a global computer-chip shortage has left car dealers with a dearth of inventory. As a result, auto sales likely fell last month. Read more. (Subscription required.) 

Amid pandemic shocks to the supply chain, what does the future hold for the auto industry? Scott Wolfson of Wolfson Bolton PLLC (Troy, Mich.) provides his perspectives on the latest episode of ABI’s #IndustryViewpoints. Watch here. 

For further information and perspectives on supply chain interruptions and bankruptcy, pick up your copy of ABI's Interrupted! Understanding Bankruptcy's Effects on Manufacturing Supply Chains.

Lawsuits brought by white business owners challenging a policy that prioritized applicants for pandemic relief grants on the basis of gender and race have thrown the federal government’s Restaurant Revitalization Fund into turmoil, the New York Times reported. Tens of thousands of applicants who expected an easier path through the $28.6 billion aid program are now stuck in limbo, and nearly 3,000 restaurant owners whose grants were approved have been told they can’t be paid. The money is running out fast: The program has distributed $27.5 billion to about 100,000 applicants, an agency official said on Monday. When Congress created the Restaurant Revitalization Fund in March, lawmakers ordered the Small Business Administration, which runs the program, to include a 21-day exclusivity period. During that time, only applications from women, military veterans and “socially and economically disadvantaged” individuals — defined by the agency as those from certain racial and cultural groups who also had limited financial means — would be approved. Others could file their applications, but had to wait to have their requests reviewed. The fund began taking applications on May 3 and was soon overwhelmed. More than 362,000 businesses applied, seeking $75 billion — nearly three times what Congress had allocated. Little, if any, money would have been left for applicants outside the priority groups. Some restaurant owners sued, claiming that the priority period was discriminatory. Several judges agreed, prompting the agency to alter its approach. In court filings on Friday, the agency said it had — in late May, in response to the legal actions — stopped payment on priority applications. The 2,965 people whose approvals were revoked will be paid only “once it completes processing all previously filed non-priority applications, and only then if the R.R.F. is not first exhausted,” the agency said. Other applicants who expected to be part of the priority queue — tens of thousands of them, according to industry groups — are stalled, waiting to hear if they’ll be approved. About 72,000 of the applicants who have already been paid were covered by the priority process, Patrick Kelley, the head of the agency’s Capital Access office, said on Monday. They received $18 billion of the $27.5 billion that has been handed out.

Sen. Susan Collins said on Sunday that there won’t be any gas tax hike or any undoing of former President Donald Trump’s signature 2017 tax bill in the infrastructural proposal she and a small bipartisan group of lawmakers are developing, Politico reported. Appearing on CBS News' “Face the Nation,” the Maine Republican offered some ideas on how the group intends to pay for the plan. She listed three pay-fors: an infrastructure financing authority, repurposing unused COVID-19 relief funds, and a provision to ensure that drivers using electric vehicles pay their fair share for using the nation's roads and bridges. The bipartisan group of senators released a statement Thursday saying it had reached a deal, but it didn't include an overall price tag or details about how it would be financed. The group said the plan would be “fully paid for” and “not include tax increases,” but didn't offer more specifics. Earlier, infrastructure talks between Sen. Shelley Moore Capito (R-W.Va.), who was leading the GOP’s effort to negotiate with the White House, and President Joe Biden fell apart. Now, the bipartisan group of senators believes it's nearing a deal that it can take to Senate Majority Leader Chuck Schumer (D-N.Y.) and Minority Leader Mitch McConnell (R-Ky.).

A pandemic-fueled revival in sales of Gibson guitars may help produce a windfall for KKR & Co., controlling owner of the iconic brand favored by music legends from Eric Clapton to Joan Jett, Bloomberg News reported. Gibson Brands Inc. is marketing a $250 million first-lien term loan that will be used to fund dividend payments and add cash to its balance sheet. KKR took control of the guitar maker during its 2018 bankruptcy process as one of Gibson’s biggest lenders, holding $198 million of the company’s notes at the time. About $225 million of the loan sale will fund the dividend, according to Moody’s Investors Service, which assigned a B2 rating to the company, five levels below investment-grade. KKR led a rescue of Gibson almost three years ago, when guitar enthusiasts at the private equity company helped the manufacturer exit bankruptcy. Sales at the 127-year-old instrument maker took off last year, as COVID-19 lockdowns spurred people to seek new hobbies like guitar playing. Gibson’s order book and sales backlog are now the largest in the company’s history.

Washington Prime Group Inc., a real estate investment trust that operates enclosed malls and strip centers across the U.S., filed for bankruptcy after the COVID-19 pandemic curtailed in-person shopping, Bloomberg News reported. The chapter 11 filing in Houston will allow Washington Prime to continue operating while it seeks to implement a restructuring agreement that it reached with certain creditors, according to a board resolution filed with the bankruptcy petition. The company, which estimated its assets at about $4 billion and debt of almost $3.5 billion, secured an up to $100 million debtor-in-possession loan that would help fund operations during court proceedings. The Columbus, Ohio-based firm that operates around 100 malls, saw its bonds tumble into distressed territory in 2020 as rent collections dried up and tenants filed for bankruptcy or went out of business. It began negotiating with its creditors last year and skipped a $23 million bond interest payment in February. Creditors had been extending a forbearance agreement amid the talks.