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Citigroup Inc. sued Brigade Capital Management LP for the return of the hedge-fund manager’s share of nearly $900 million that the bank said it mistakenly paid to Revlon Inc. lenders, WSJ Pro Bankruptcy reported. Brigade “has unlawfully attempted to capitalize on the mistaken payment,” Citi said in the complaint, filed in New York federal court Monday. Brigade and other lenders have taken the position that they aren’t obligated to return the money, The Wall Street Journal reported Friday. Revlon has said that it didn’t pay the money itself. In the lawsuit, Citi said that the payment on a loan issued by Revlon in 2016 came from the bank’s own funds. Citi, in charge of collecting payments and communicating with the syndicate of lenders that provided the 2016 loan to Revlon, asked for a court order requiring Brigade to give up its share of the loan payment made last week, roughly $175 million.

Payless ShoeSource Inc. twice filed for bankruptcy protection and last year closed its 2,500 North American stores. Now, amid the coronavirus pandemic, the discount shoe retailer is attempting its third comeback, the Wall Street Journal reported. The company, which emerged from chapter 11 bankruptcy protection in January and is now called Payless Worldwide, is relaunching its website today and plans to open as many as 400 stores in North America over the next five years, with the first location slated for Miami this fall. It is following other troubled brands that have found new life online or with smaller physical footprints, such as Toys “R” Us, RadioShack, Dressbarn and Barneys New York. Even retailers that have avoided bankruptcy are closing stores and shifting more online, such as Gap Inc. and Macy’s Inc. Digital startups that had started opening bricks-and-mortar stores are backtracking, including clothing rental service Rent the Runway, which is closing its four retail stores and converting a fifth to a drop-off location. Payless CEO Jared Margolis said the company’s prior trouble is allowing it to restart without the bloated overhead, antiquated technology and thousands of bricks-and-mortar stores that had become a liability as more shopping shifted online, a trend that has accelerated during the health crisis.

A group of lenders to Ascena Retail Group Inc., owner of the Ann Taylor and Lane Bryant clothing chains, is objecting to the company’s plan for a rescue financing package to see it through bankruptcy, Bloomberg News reported. The group is working with law firm King & Spalding as it resists a debt proposal put forward by another set of term loan holders, said the people, who asked not to be identified discussing a private matter. The objecting group includes Z Capital Credit Partners, Marathon Asset Management and Man GLG, the people said. It’s the latest in a series of creditor brawls that have broken out as the pandemic triggers a wave of bankruptcies. Rising corporate distress is pitting beleaguered companies, their sponsors and lenders against each other in fights many say are uglier, dirtier and more vicious than ever before. In the case of Ascena, the objection relates to the debtor-in-possession loan proposed as part of a restructuring support agreement when the company filed for bankruptcy in July. The RSA had the support of 68 percent of the term loan lenders and the DIP includes $150 million of new money, though creditors had to hold at least $20 million to be part of the group.

Hertz Global Holdings Inc. promoted its chief accounting officer to chief financial officer, succeeding Jamere Jackson, who the company said resigned to pursue a new opportunity, the Wall Street Journal reported. The bankrupt car-rental company appointed R. Eric Esper, its head of accounting since November 2018, as CFO, effective immediately. Esper previously served as the company’s controller and before that worked in various finance roles at Norwegian Cruise Line Holdings Ltd. His annual base salary will increase to $510,000 from $375,000 as part of the move, Hertz said. Esper will retain responsibility for accounting, according to a spokeswoman. Jackson, who had been CFO since September 2018, will remain with Hertz until Sept. 11 to assist with the transition and will forfeit his retention bonus, the Estero, Fla.-based company said in a filing with regulators.

Casual dining chains were already facing challenges before COVID-19, hurt by the rise of fast-casual competition and increased food costs. Now, several of the largest restaurant companies in the U.S. are struggling with capacity restrictions on indoor dining and attempting to lure customers with takeout in a bid to avoid financial disaster, USA Today reported. The owners of chains like Outback Steakhouse, Applebee’s and The Cheesecake Factory are on a newly updated list of national restaurants that are facing the highest likelihood of not paying back their debts. When companies default on loans, they are often forced to file for bankruptcy protection, close locations or occasionally liquidate. One chain, California Pizza Kitchen, has already filed for chapter 11 protection, with plans to close some locations. While the nation’s largest publicly traded restaurants face a less than 1 in 5 chance of defaulting in the next year, according to the new report by S&P Global Market Intelligence, they remain in perilous terrain. Analysts are particularly concerned about the coming winter, which will eliminate outdoor seating options for many restaurants, and the demise of the extra $600 in unemployment benefits that had been available for jobless Americans. Congress is debating whether to extend those benefits. “The odds that the largest publicly traded U.S. restaurants will default fell in recent months as states allowed businesses closed by the coronavirus pandemic to reopen,” S&P says in the new report. “But the ongoing financial hits from the virus and uncertainty over whether laid-off consumers will receive expanded unemployment benefits continue to pressure the industry as more companies enter bankruptcy.”

Commerce Department data released today showed that U.S. retail sales increased 1.2 percent from the prior month after an upwardly revised 8.4 percent gain in June, Bloomberg News reported. The total value of retail sales was above pre-pandemic levels, and July purchases were up 2.7 percent from a year earlier, indicating one major part of the economy has returned to near its previous trend. The slowdown, compared with June, reflected declines in sales of motor vehicles and building materials, along with weaker gains at restaurants and clothing stores. The report is in line with previous high-frequency data that suggested the economic rebound largely stalled in July. The so-called “control group” subset of sales, which excludes food services, car dealers, building-materials stores and gasoline stations -- and is sometimes seen as a better gauge of underlying trends -- rose 1.4 percent from the prior month, more than analysts projected. The retail sales report showed nine of 13 major categories rose, with the biggest increase coming at electronics and appliance stores. Such sales jumped 22.9 percent following a 37.6 percent gain in June.

Citigroup Inc. paid nearly $900 million by mistake to Revlon Inc. lenders and is asking for the money to be returned, WSJ Pro Bankruptcy reported. Lenders that sued Revlon on Wednesday over its debt-restructuring tactics were surprised to learn yesterday that they had been fully repaid on a loan issued in 2016. Citi executives were soon asking for the money back, saying it was paid inadvertently due to an operational error. The lenders were paid the full principal and accrued interest on the loan, one of the people said. Revlon has been at loggerheads with lenders holding the 2016 loan, including Brigade Capital Management LP, HPS Investment Partners LLC and Symphony Asset Management. The lawsuit filed on Wednesday in New York federal court accused Revlon of moving valuable brand assets beyond their reach to use as collateral for other creditors. The lawsuit said that the cosmetics company had breached its loan agreements by siphoning off intellectual property including those for American Crew, Elizabeth Arden, Almay and other brands, transferring them to subsidiaries and pledging them as collateral. Backed by billionaire Ron Perelman’s MacAndrews & Forbes, Revlon has been struggling with a large debt load, and more recently, headwinds stemming from the coronavirus pandemic’s devastating impact on American retailing.

Mark Frissora, the former chairman and chief executive officer of Hertz Global Holdings Inc., will return nearly $2 million in incentive-based compensation to settle a U.S. regulator’s claims that he played a key role in causing the now-bankrupt car-rental company to file inaccurate financial statements in 2013, Bloomberg News reported. Frissora pressured subordinates to “find money,” mainly by re-analyzing reserve accounts, as Hertz’s financial results fell short of forecasts in 2013, the Securities and Exchange Commission said in a statement Thursday. He also kept older cars in the company’s rental fleet longer to lower depreciation costs without disclosing the change to investors, the SEC said. Hertz reaffirmed earnings guidance in November 2013 despite internal projections that showed lower earnings per share figures, according to the SEC. The company then revised the results in 2014 and restated them in 2015, cutting previously reported pretax income by $235 million, the SEC said. Hertz agreed to pay $16 million to resolve SEC claims over the misstatements. Frissora, who agreed to settle without admitting or denying the SEC’s claims, will pay a $200,000 fine in addition to returning nearly $2 million in incentive-based pay. He left Hertz in September 2014 after investors pushed for his removal and went on to serve as president of Caesars Entertainment Corp. for four years through April 2019. Hertz, which filed for bankruptcy in May, said earlier this week that it is seeking debtor-in-possession financing. That came after the SEC raised questions about a plan to issue as much as $500 million of equity, forcing Hertz to terminate the offering after raising just $29 million from investors.

Stein Mart Inc. has filed for bankruptcy with plans to permanently close all or most stores, becoming the latest distressed retailer to succumb to the economic fallout caused by restrictions due to the coronavirus pandemic, WSJ Pro Bankruptcy reported. The discount department-store chain, which has locations nationwide, filed for chapter 11 protection on Wednesday in U.S. Bankruptcy Court in Jacksonville, Fla. Stein Mart said it is evaluating strategic alternatives, including the potential sale of its e-commerce business and related intellectual property. The decision to file for bankruptcy comes after the publicly traded company raised substantial doubt in June about its ability to stay in business over the next 12 months due to the pandemic’s adverse effects on revenue, operations and cash flow. Stein Mart’s sales had been under pressure since 2016, but COVID-19 further hurt the company’s business due to lower in-store traffic that strained its credit facilities, as it borrowed seasonally higher amounts to cover cash shortfalls from lower sales.