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Private-equity firm Centerbridge Partners LP has increased its offer to buy Speedcast International Ltd. out of bankruptcy to $500 million, two months after another top creditor of the Australian satellite-communications company floated a competing offer for the business, WSJ Pro Bankruptcy reported. Centerbridge’s offer, up from an earlier commitment of $395 million, is part of a broader reorganization proposal backed by the private-equity firm that has the support of Speedcast’s board and a committee representing the company’s unsecured creditors, according to papers filed Saturday in the U.S. Bankruptcy Court in Houston. Speedcast’s largest lender, Black Diamond Capital Management LLC, in August moved to top Centerbridge’s initial offer and sought more information on decisions made by management surrounding the sale process. Publicly traded Speedcast said in a court filing that even with the Centerbridge offer in hand, it would continue looking for better bids as it works to exit bankruptcy. A bankruptcy judge is scheduled to consider approving Speedcast’s chapter 11 plan in December, and the company expects to leave bankruptcy during the first quarter of 2021, subject to court and regulatory approvals and other customary closing conditions.

Australia yesterday unveiled its biggest shakeup in bankruptcy laws in nearly three decades, allowing small businesses to trade while insolvent and take more control over debt restructuring, in a bid to help firms through the coronavirus crisis, Reuters reported. The new rules will help manage an expected avalanche of insolvencies when wage subsidies introduced to help companies survive the virus-triggered recession start to wind down early next year. Under the proposed rule changes, businesses with liabilities of less than A$1 million ($708,000) will be able to keep operating for 20 business days while they come up with a debt restructuring plan, rather than be placed in the hands of administrators. The changes, effective from Jan. 1, 2021, aim to move the system “from a rigid, one-size-fits-all creditor in possession model to a more flexible debtor in possession model,” Federal Treasurer Josh Frydenberg said in a statement. The government would adopt some rules from the U.S.-style chapter 11 process, he said, which gives struggling companies a window to restructure debt while being protected from the threat of legal action by creditors.

Avianca Holdings SA, one of Latin America’s largest airlines, lined up a $2 billion bankruptcy-loan package to finance its stay in chapter 11 from a group of investors and lenders including United Airlines Inc. and Chairman Roberto Kriete, WSJ Pro Bankruptcy reported. Since filing for bankruptcy in May after the coronavirus pandemic curtailed flying, Avianca has been working to raise capital to stay in business as air travel remains deeply depressed world-wide. With the loan proposal, the three large Latin American airlines pushed into bankruptcy by the pandemic — Avianca, Latam Airlines Group SA and Grupo Aeromexico SAB — have all found sources of private capital to weather the financial impact of COVID-19. Avianca is fast running out of cash, with its balance down to $150 million. The airline expects to remain in the red for at least eight more months, according to a court filing by Avianca’s investment banker John Luth. It resumed commercial flights Sept. 1. The loan package is backed by the company’s LifeMiles loyalty program, estimated to be valued at as much as $1.6 billion, as well as by its cargo business, according to Luth’s declaration.

Avianca Holdings yesterday said that it had appealed a court order that last week banned Colombia’s government from providing the troubled airline with a $370 million loan to finance part of its bankruptcy restructuring, Reuters reported. The airline, which filed for bankruptcy in May due to the coronavirus pandemic’s effect on travel, said that without the loan, keeping the company afloat would become “untenable.” The loan is part of a $2 billion financing package that is key to the carrier exiting bankruptcy protection. The Colombian government’s slice of the package had been questioned in a Colombian court under the argument that Avianca’s guarantees on the loan were insufficient. Last week, Avianca rival, LATAM Airlines Group also faced a setback in its own bankruptcy process when a U.S. judge turned down a $2.4 billion financing package because it considered it to be too advantageous to the carrier’s major shareholders.

The Canadian owner of 322 Garage and Dynamite women’s clothing and accessories stores has filed for bankruptcy in the U.S. and plans to close some of its locations after struggling with fallout from the coronavirus pandemic, the Wall Street Journal reported. Montreal-based Groupe Dynamite Inc. filed its chapter 15 petition on Tuesday in response to “the refusal of certain landlords to negotiate and agree on a Covid-19-adjusted rental model,” Andrew Lutfy, executive chairman, said in a sworn declaration filed with the U.S. Bankruptcy Court in Wilmington, Del. The company, which is undertaking similar legal proceedings in Canada, said that it expects its business to continue to suffer until a vaccine is available. One of the goals of the retailer’s restructuring is to free itself from a minority of its leases that are deeply unprofitable, Lutfy said. But the business also wants to renegotiate leases of other unprofitable stores, and, if those talks fail, those locations could close as well, he said. Groupe Dynamite has been able to renegotiate 22 of its 322 leases, Lutfy said. Read more. (Subscription required.) 

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. 

Aeromexico said yesterday that it has received the initial $100 million payment of debtor-in-possession (DIP) financing as it undergoes chapter 11 bankruptcy proceedings, Reuters reported. The Mexican airline has been approved for DIP financing of up to $1 billion. Aeromexico Chief Executive Andres Conesa said in a statement the disbursement is an “important step” for supporting operations during the company’s restructuring.

A U.S. bankruptcy judge yesterday granted recognition of Virgin Atlantic’s rescue plan under chapter 15 of the U.S. Bankruptcy Code, Reuters reported. The airline’s 1.2 billion pound ($1.59 billion) rescue deal is set for completion this week after a London judge gave the go-ahead to the company’s restructuring plan in a court hearing on Wednesday. The deal aims to secure Virgin Atlantic’s survival through the coronavirus crisis. The airline had projected it would run out of cash at the end of September unless the plan was approved. Read more. 

In related news, Virgin Australia Holdings Ltd’s creditors voted today in favor of the purchase of Australia’s second-biggest airline by U.S. private equity group Bain Capital, administrator Deloitte said, paving the way for a strategic overhaul, Reuters reported. The deal will allow the carrier to emerge from voluntary administration, which it had entered in April owing A$7 billion ($5 billion) to creditors after suffering from a sharp plunge in demand due to the coronavirus pandemic. The Bain deal gives unsecured creditors a return of 9 percent to 13 percent of their investment and involves a financial commitment of A$3.5 billion, according to administrator Deloitte, which said Virgin shares should be transferred to the private equity group by Oct. 31. Read more. 

Argentina has defused fears of a messy default after it gained backing from creditors, allowing it to exchange 99 percent of the bonds involved in a $65 billion restructuring, a deal that could set a precedent for future sovereign crises, Reuters reported. After months of winding and tense negotiations, framed by the coronavirus pandemic, bondholders tendered 93.55 percent of the eligible bonds in the exchange, Economy Minister Martin Guzman said yesterday. “In recent days we have worked on the conditions of an offer that gained massive acceptance by our creditors as a result of the dialogue process in past months,” Guzman said. A strong deal is a major win for Argentina, Latin America’s No. 3 economy, as it looks to escape from its ninth sovereign default and revive an economy in its third year of recession and expected to contract around 12.5 percent this year.

Colombia’s disaster fund will lend as much as $370 million to Avianca Holdings SA to help with its restructuring after a halt in travel during the Covid-19 pandemic forced the company into bankruptcy, the country’s finance ministry said in a statement, Bloomberg News reported. The emergency mitigation fund’s committee approved the government-backed loan, due November 2021, under the framework of debtor-in-possession financing the company is seeking in its U.S. bankruptcy court case, the ministry said in a statement on Friday. Avianca, one of the biggest airlines in Latin America, filed for chapter 11 protection in New York in May after travel bans forced the airline to ground its fleet. It reached an agreement with lenders this month for a substantial part of the $2 billion it’s trying to raise as it restructures. The company is offering one of the highest premiums yet seen on a $1.3 billion debtor-in-possession loan.