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Avianca Holdings, Latin America’s second-largest airline, filed for bankruptcy on Sunday, after failing to meet a bond payment deadline, while its pleas for coronavirus aid from Colombia’s government have so far been unsuccessful, Reuters reported. If it fails to come out of bankruptcy, Bogota-based Avianca would be one of the first major carriers worldwide to go under as a result of the pandemic, which has crippled world travel. Avianca has not flown a regularly scheduled passenger flight since late March and most of its 20,000 employees have gone without pay through the crisis. Avianca, the second-oldest continually operating airline in the world after KLM, had $7.3 billion in debts in 2019. The airline filed for chapter 11 bankruptcy in New York and said that it would continue operations while it restructured its debts.

Footwear retailer Aldo Group Inc. began a court restructuring process yesterday after the pandemic shuttered stores and worsened the company’s already-struggling business, Bloomberg News reported. The Montreal-based company operates about 3,000 stores and employs 8,000 people worldwide. It requested court protection through the Companies’ Creditors Arrangement Act in Canada, is seeking similar protection in the U.S. and is about to do the same in Switzerland, Aldo said in a statement. Ernst & Young Inc. was appointed as the monitor in the Canadian proceedings. “The impact of the Covid-19 pandemic has put too much pressure on our business and our cash flows,” Chief Executive Officer David Bensadoun said in the statement. “After conducting an exhaustive review of strategic alternatives, we determined that filing under CCAA and related proceedings is in Aldo’s best interest to preserve the company for the long term and survive through this challenging period.” The retailer expects to carry on business while it develops and implements a restructuring plan across the organization, Bensadoun said. Aldo’s pre-petition debt includes a C$300 million ($214 million) revolving loan arranged by Bank of Montreal that matures in October 2022. Aldo has struggled in recent years to maintain relevance in a world of increasing acceptance of casual footwear. Bensadoun said in a 2018 interview that the company was competing with makers of athletic wear as more workplaces embrace casual attire.

The Department of Justice said that the U.S. has reached a settlement to recover more than $49 million involving Malaysian sovereign wealth fund 1MDB, Reuters reported. The government of former Malaysian Prime Minister Najib Razak set up the 1MDB fund in 2009. The Justice Department has estimated more than $4.5 billion was siphoned out of Malaysia by high-level fund officials and their associates between 2009 and 2014 in a scandal that has also embroiled Goldman Sachs Group Inc. The DOJ said yesterday that it has settled its civil forfeiture cases against assets acquired by the former managing director of Abu Dhabi’s International Petroleum Investment Company (IPIC), Khadem al-Qubaisi, using funds allegedly misappropriated from 1MDB and laundered through financial institutions in several jurisdictions, including the United States, Switzerland, Singapore and Luxembourg.

Switzerland and Austria pledged to help Lufthansa with state-backed loans as the German airline pursues talks with Berlin over a 9 billion euro ($9.8 billion) rescue package, Reuters reported. The Swiss government said yesterday that it will ask parliament for 1.275 billion francs in loan guarantees for Lufthansa units Swiss and Edelweiss. Strict travel restrictions to contain the coronavirus pandemic have brought flights to a near-halt across the world and there is no end in sight for when they can restart, leaving many airlines begging governments for rescue packages. The International Air Transport Association this month estimated that revenue losses from the coronavirus pandemic have risen to $314 billion. Lufthansa’s Austrian airline AUA said on Tuesday that it had applied for 767 million euros in state aid, of which a large part should be repayable loans and the remainder grants. An AUA spokesman said these grants were still under negotiation and both Switzerland and Austria attached conditions on their participation in the bailout.

Dominion Diamond Mines ULC has sought bankruptcy protection from creditors after shutting down mining operations to maintain social-distancing protocols during the coronavirus pandemic, WSJ Pro Bankruptcy reported. The company, which operates in Canada’s Northwest Territories, filed for the protection under the Companies’ Creditors Arrangement Act, Canada’s version of chapter 11, with a deal from its current equity owner, the Washington Cos., to provide debtor-in-possession financing as well as serve as a so-called stalking-horse bidder for Dominion’s assets. A stalking horse provides a baseline bid against which a bankrupt company may seek better offers. Dominion said that while it still has strong diamond inventory, its Indian sorting and processing operations in Mumbai and its sales center in Antwerp, Belgium, have been closed due to the pandemic. Dominion has $180 million of inventory that is trapped due to travel and business restrictions imposed by Canada, India and Belgium, Chief Financial Officer Kristal Kaye said in an affidavit filed with Alberta’s Court of Queen’s Bench. Despite the problems facing the diamond industry, Dominion has been forced to make large monthly cash payments for its interests in one of its mines, which has created a liquidity crisis for the company, Kaye said.

A group of bondholders has rejected a proposal from Argentina to restructure tens of billions of dollars in foreign debt, raising the likelihood that the South American nation could enter into default as early as next month, the Wall Street Journal reported. Other bondholders are expected to follow suit to present a united front against the deal. The Argentina Credit Committee — a group that includes mutual funds, insurance companies and asset managers — said today that the offer from President Alberto Fernández’s government fell far short of bondholder expectations. The committee said it hasn’t received “substantiated forward-looking economic and financial information” from Argentina, nor seen feasible economic policies. “The ACC has reviewed Argentina’s proposal and cannot support it,” the group said in a statement. “The ACC invites Argentina to abandon the unilateral route and make time for a meaningful negotiation.” A separate committee of large mutual funds including BlackRock Inc. plans to make a similar announcement shortly. On Friday, Argentina presented a proposal to exchange some $65 billion in foreign bonds into new debt at lower interest rates and with later due dates in a bid to avoid another painful default. The offer involves more than $40 billion in debt relief, mainly through reduced interest payments. It includes a three-year moratorium on foreign-debt payments, with an average coupon of 2.33 percent once interest payments resume.

The City of Vancouver is at risk of going bankrupt, says Mayor Kennedy Stewart, citing a recent poll showing more than half of property owners are not expecting to pay full property taxes this year as COVID-19 financial woes take hold, the Vancouver Sun reported. Stewart said that his earlier claim that the city would lose up to $189 million in revenue and fee shortfalls in 2020 could be $325 million short of the mark. The city has already laid off 1,500 workers. “If 25 percent of homeowners do end up defaulting on their property taxes, we could shed up to an additional $325 million in revenues,” Stewart said. “Losing more than half-a-billion dollars in operating funds in 2020 would devastate the city’s financial position, forcing us to liquify assets and exhaust every reserve fund we have — just to avoid insolvency.” Property taxes make up the bulk of the city’s revenues at $874 million in 2019.