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The government agency responsible for assuming the pension obligations of distressed companies said this week that it will take on McClatchy Co.’s plan if a bankruptcy judge determines that the local news company won’t survive otherwise, McClatchyDC.com reported. The court filing by the federal Pension Benefit Guaranty Corp. was among several key developments this week as the company seeks to exit chapter 11 bankruptcy. In another, McClatchy’s deadline for accepting initial bids from interested buyers passed on Tuesday, triggering the next phase of bankruptcy proceedings that the company had hoped would be over by now. But that was before the Covid-19 crisis, which upended the global economy and slowed the company’s negotiations with creditors, scrambling its restructuring plans. McClatchy has said that at least 20 potential buyers signed non-disclosure agreements to look into the finances of the nation’s second largest local news company. It hinted in previous filings that it expected multiple offers in a process that set a July 24 deadline for Bankruptcy Judge Michael E. Wiles to approve a buyer. A spokeswoman for McClatchy declined to say Wednesday how many parties submitted an initial bid. The deadline for final bids is July 1.

Public pension plans lost a median 13.2 percent in the three months ended March 31, according to Wilshire Trust Universe Comparison Service data released today, slightly more than in the fourth quarter of 2008, the Wall Street Journal reported. March’s stock market plummet led to the biggest one-quarter drop in the 40 years the firm has been tracking. Stocks bounced back in April, making up a significant chunk of the losses. But absent a full and speedy recovery, pension losses are poised to drive up already-burdensome retirement costs for governments. “There will be a lot of pressure to cut benefits,” said Don Boyd, co-director of the State and Local Government Finance Project at the University at Albany’s Rockefeller College. State and local governments “are trying to figure out how to not cut school aid too deeply, not cut Medicaid too deeply, not raise taxes,” Boyd said. “Pension contributions are pretty far down the list of things they want to pay for.” Even before the record first-quarter losses, public pension plans were $4.1 trillion short of the $8.9 trillion they will need to cover promised future benefits, according to the Federal Reserve. Decades of overoptimistic return assumptions, insufficient pension-fund contributions and lengthening lifespans created massive shortfalls in public pension funds that the 11-year bull market didn’t cure. Over the past decade, public pensions had ramped up stockholdings and other risky investments in an effort to meet aggressive return targets that average around 7 percent, according to a survey by the National Association of State Retirement Administrators.

The White House has begun informal talks with Republicans and Democrats in Congress about what to include in another round of coronavirus relief legislation, officials said yesterday, while predicting further U.S. jobs losses in the coming months, Reuters reported. Officials in President Donald Trump’s administration, including Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow, said they were holding discussions with lawmakers on issues including potential aid to states whose finances have been devastated by the pandemic. Another White House economic adviser, Kevin Hassett, said future legislation could include food aid to help Americans struggling with hunger amid widespread job losses that have ruined the finances of many people. It also could include broadband access for those who lack it, Hassett added. While Democrats, who control the House of Representatives, are moving to unveil new legislation as early as this week, the White House signaled it is in no hurry to pass another relief bill. Since early March, Congress has passed bills allocating $3 trillion to combat the pandemic, including taxpayer money for individuals and companies to blunt an economic impact that includes an unemployment rate to 14.7% in April after U.S. job losses unseen since the Great Depression of the 1930s. “We just want to make sure that before we jump back in and spend another few trillion of taxpayers’ money that we do it carefully,” Mnuchin said. “We’ve been very clear that we’re not going to do things just to bail out states that were poorly managed.” Hassett said that the U.S. unemployment rate could rise to somewhere “north of 20 percent” in May or June before the economy moves into what administration officials have said will be a robust recovery in late 2020.

A bankruptcy judge in New York held turnaround executive Lynn Tilton responsible under state law for covering wages to employees who went unpaid in the bankruptcy of defunct ambulance company TransCare Corp., WSJ Pro Bankruptcy reported. Transcare filed for bankruptcy in February 2016, leaving its ambulances driven by people who wouldn’t get their final paychecks, according to a ruling issued Thursday by Judge Stuart Bernstein of the U.S. Bankruptcy Court in Manhattan. Court-appointed trustee Salvatore LaMonica, unable to get assurances he would get money for payroll and worried that ambulance workers would simply abandon vehicles complete with their caches of drugs, shut down the business and rounded up the vehicles. The ruling granted partial judgment to a class of employees that sued in bankruptcy court for unpaid wages after the ambulance company laid them off. It clears the way for a trial on claims by 1,800 ambulance company employees who were put out of work by TransCare’s collapse. In addition to state-law claims for unpaid wages, which could add up to about $1.7 million, former TransCare employees are pursuing damages under laws requiring advance notice of mass layoffs.

Factory furloughs across the U.S. are becoming permanent closings, a sign of the heavy damage the coronavirus pandemic and shutdowns are exerting on the industrial economy, the Wall Street Journal reported. Makers of dishware in North Carolina, furniture foam in Oregon and cutting boards in Michigan are among the companies closing factories in recent weeks. Caterpillar Inc. said that it is considering closing plants in Germany, boat-and-motorcycle-maker Polaris Inc. plans to close a plant in Syracuse, Ind., and tire maker Goodyear Tire & Rubber Co. plans to close a plant in Gadsden, Ala. Those factory shutdowns will further erode an industrial workforce that has been shrinking as a share of the overall U.S. economy for decades. While manufacturing output last year surpassed a previous peak from 2007, factory employment never returned to levels reached before the financial crisis.

The U.S. economy likely lost a staggering 22 million jobs in April, in what would be the steepest plunge in payrolls since the Great Depression and the starkest sign yet of how the novel coronavirus pandemic is battering the world’s biggest economy, Reuters reported. A report that is closely watched in any given month but especially so now with non-essential businesses in mandatory shutdowns nationwide to contain the coronavirus, the Labor Department’s monthly employment report today is also expected to show the jobless rate surging to at least 16 percent last month. That would shatter the post–World War Two record of 10.8 percent touched in November 1982. The numbers will likely strengthen analysts’ expectations of a slow recovery from the recession caused by the pandemic. It would add to a pile of bleak data on consumer spending, business investment, trade, productivity and the housing market in underscoring the devastation unleashed by lockdowns imposed by states and local governments in mid-March to slow the spread of COVID-19, the respiratory illness caused by the virus.

Businesses looking for a quick return to normal are running into a big hitch: Workers on unemployment benefits are reluctant to give them up, the Wall Street Journal reported. That’s complicating plans to reopen states and get the U.S. economy back on track. For some workers, unemployment benefits are now paying more than their old jobs did. For others, safety concerns or a lack of child care, as most schools and day-care centers remain closed, are making them hesitant to go back. That means reopening may not go as quickly or as smoothly as some elected officials and business owners had hoped. Friday’s jobs report is expected to show U.S. employers cut 21.5 million jobs in April, or the equivalent of all the jobs added in the past decade. The pressure for businesses to staff back up is especially intense as many have tapped federal loans contingent on paying employees. The government’s Paycheck Protection Program forgives the loans if companies bring back all workers within eight weeks of receiving funds that can be used to pay operational expenses such as payroll and rent.

United Airlines Holdings Inc. plans to cut at least 3,400 management and administrative positions in October as the coronavirus pandemic crushes air travel demand, and has told pilots to brace for changes as well, Reuters reported. Chicago-based United is among the U.S. airlines that have accepted U.S. government payroll aid that bans job or pay cuts before Sept. 30. However, United and other carriers have warned that demand is unlikely to recover to pre-crisis levels by that date, forcing them to shrink in the fall. The United memos are the first indication of just how much major airlines might downsize due to the health crisis. “We have to acknowledge that there will be serious consequences to our company if we don’t continue to take strong and decisive action, which includes making decisions that none of us ever wanted or expected to make,” Kate Gebo, Executive Vice President Human Resources and Labor Relations, said in the memo to some 11,500 management and administrative employees.