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Avis Budget Group Inc.’s stock closed at a record high yesterday as an economic reopening that’s boosting travel demand collides with industrywide inventory tightness, Bloomberg News reported. Shares of Parsippany, N.J.-based Avis rose 1.9% to $77.24, more than doubling so far this year and soaring from a pandemic low of $7.78 in March 2020. The industry is raising prices as post-vaccination business and leisure travel surges and household-name rental companies don’t have enough cars for customers to drive off the lot. The firms are adding cars back to their fleets, but cautiously. During the early months of the pandemic, Avis and rivals Hertz Global Holdings Inc. and Enterprise Holdings Inc. sold large portions of their inventory and cut costs severely to shore up finances as U.S. travel ground to a halt. Now, their ability to restock cars is also being hampered by automakers pausing production due to a global semiconductor shortage. Automakers’ sales to fleet customers fell about 30% in the first quarter, according to analyst estimates. Carmakers are seeing nascent signs of increased fleet demand but are prioritizing sales to higher-margin retail buyers. “Fleet is definitely coming back,” Judith Wheeler, Nissan Motor Co.’s vice president for U.S. sales, said in an interview April 1. “We will try to do our part to give them some inventory, but we’re going to focus on retail.” Even so, Avis shares continue to soar as main rival Hertz faces restructuring from bankruptcy and analysts see tailwinds from the pandemic lasting into the second half of this year.

The Collected Group, which owns lifestyle brands Joie, Current/Elliott and Equipment, has filed a petition under chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware, Fibre2Fashion.com reported. The U.S. company, which closed stores even before the pandemic, plans to focus on e-commerce and wholesale, according to the company’s filings on April 12. The company plans to use the bankruptcy proceedings to facilitate those store closures and cut more than 80 percent of its debt, it said in a statement. James Miller, the chief executive officer since 2017, will step down and take on an advisor title and be on the company’s board. The new CEO will be Silvia Mazzucchelli, a board member who was also the former CEO of Modcloth. The bankruptcy filing follows dwindling sales, liquidity issues and a disrupted sale process, all of which have been attributed to the COVID-19 pandemic. The company, which was founded in 2001 and is owned by private equity firm KKR, owned 33 branded stores across the US at its peak. With store closures during the pandemic, retail revenues fell by 85 percent in 2020 and wholesale revenues by 70 percent. E-commerce, however, grew 37 percent during the year to $27.8 million, which was about half the company’s revenues for the year.

Fast-casual chain Meatheads Burgers & Fries, which has received more than $2.4 million in PPP funding, has declared bankruptcy, Restaurant Business reported. The chain, which lists 13 locations around the Chicago area on its website, filed for chapter 11 protection in the Northern District of Illinois on Friday, as did its owner Crave Brands, LLC. But the company's lender is not so sure. LQD Financial Corp. filed a motion to dismiss the case on Tuesday, saying that the bankruptcy filing was a “stunt Crave’s former manager pulled to stay in charge” and that the filings were made in bad faith. In its chapter 11 filing, Meatheads said it had liabilities totaling $8.4 million with total assets of $6.7 million. The chain received a Paycheck Protection Program loan of $982,112 in 2020 and nearly $1.44 million in PPP funding during the second round this year. Crave Brands, LLC, the owner of Meatheads which also filed for bankruptcy protection on Friday, received an Economic Injury Disaster Loan for $149,000.

The coronavirus pandemic made the legal system in New York much friendlier toward commercial property owners with assets in default who are facing a foreclosure sale under the Uniform Commercial Code (UCC). But, it looks as though the empathy is starting to run out, according to a commentary in the Commercial Observer reported. A ruling by Justice Jennifer Schecter in the First Department of the Appellate Division of the New York Supreme Court last month has made it more difficult for borrowers and their counsel to claim hardship and economic uncertainty caused by the pandemic as a reason to enjoin, or avoid, a UCC Article 9 foreclosure auction. The decision, in Shelbourne BRF LLC et al. v. SR 677 Bway LLC, has also likely “opened the floodgates” to a potential wave of last-resort chapter 11 bankruptcy filings from borrowers who fail to receive injunctive relief to stop UCC auction sales and save their interests in properties, according to lawyers and brokers who examined the decision. Through the pandemic, market volatility made it easier for courts to deem a UCC foreclosure sale “commercially unreasonable,” thus hampering a lender’s ability to work through default scenarios. Typically, if a borrower seeks injunctive relief to halt a UCC foreclosure sale, it’s up to them to showcase the possibility of irreparable harm as a result of it — by detailing to the court the negative effects of the loss of equity interest in a property’s controlling entity from the foreclosure sale. Judge Schecter essentially stamped that out last month, determining that a borrower’s threatened loss of equity interest does not represent irreparable harm.

U.S. Bankruptcy Judge Jerry Funk issued an order confirming Stein Mart Inc.’s chapter 11 plan that pays off secured and priority claims in full but only a fraction of unsecured claims, the Jacksonville (Fla.) Daily Record reported. The April 13 order also cancels Stein Mart’s stock. Judge Funk had said at an April 8 hearing in U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, that he would confirm the plan. Jacksonville-based Stein Mart filed its chapter 11 petitions Aug. 12 and began winding down operations, closing the last of its 281 stores Oct. 26. “The Debtors have proposed the Plan in good faith, with the legitimate and honest purpose of maximizing the value of the Debtors’ Estates for the benefit of their stakeholders,” Judge Funk said in his order.

The owner of Destiny USA, the largest shopping center in New York, is exploring a possible restructuring of the struggling property’s municipal and mortgage-backed debt obligations, WSJ Pro Bankruptcy reported. Pyramid Management Group has hired financial adviser Houlihan Lokey Inc. and law firm Orrick Herrington & Sutcliffe LLP to look into restructuring options for Destiny USA as pandemic regulations continue to affect the mall’s bottom line. A six-story structure in Syracuse, N.Y., by Onondaga Lake, Destiny USA owes roughly $286 million in municipal bond debt and about $430 million in commercial mortgage-backed securities. Bond insurer Syncora Holdings Ltd. guarantees more than a quarter of the tax-exempt debt and is being advised by investment bank Moelis & Co. and law firm White & Case LLP on the mall’s financial troubles.

Even after the pandemic ends, the retail sector is on track to close more than 80,000 stores, a 9-percent drop, as consumers continue their shift to online shopping, The Hill reported. "An enduring legacy of the pandemic is that online penetration rose sharply," wrote UBS analyst Michael Lasser. "We expect that it will continue to increase, which will drive further rationalization of retail stores, especially as some of the unique support measures from the government subside." Over a quarter of those stores will come from the clothing and accessory subsector, though office supply stores are projected to lose 45 percent of their current locations, more than 3,000 stores. Stores specializing in home improvement, grocery stores and auto parts stores will see minimal impact. The potential decline in retail could pose a significant challenge in a changing economic landscape, shifting jobs toward online fulfillment centers and putting pressure on the value of commercial real estate. The analysis assumes that online penetration will grow from its current 18 percent to 27 percent by 2026, meaning the shift to online shopping would accelerate considerably even as the pandemic continues.

Toms, the once-high-flying shoe brand, is itching for a comeback, Bloomberg News reported. It starts with expanding beyond the millennials who swooned for its slip-ons and how it donated a pair of shoes to a needy kid for each one sold. To connect with today’s teens and early 20-somethings — a group dubbed Generation Z — the brand has ended the footwear donations that keyed its breakthrough a decade ago and is now giving a third of profit to causes it says this younger cohort cares about, such as gun violence. Marketing has been revamped to focus on teens. It’s also pushing further into sneakers. This is all part of the brand’s bid to rebound from a remarkable fall that saw it sink from being touted in Vogue and worn by celebs such as Snoop Dogg and Anne Hathaway to being mismanaged by private equity into near-collapse — creditors took control of the debt-laden company in December 2019. Magnus Wedhammar, a former Nike and Converse executive, arrived shortly thereafter as CEO to clean up the mess.

The Collected Group filed for bankruptcy protection Monday to cement a rescue plan backed by the private-equity firm that controls it, KKR & Co., WSJ Pro Bankruptcy reported. The Chino, Calif.-based company is the design, distribution and retail force behind the Joie, Current/Elliott and Equipment fashion labels. The private-equity giant is Collected’s largest owner and secured lender, and is backing a turnaround plan that would leave landlords and other unsecured creditors that are owed an estimated $35.5 million unpaid, according to bankruptcy court papers. Collected already has vacated its retail stores and is hoping to wrap up its bankruptcy reorganization in the next six weeks, court papers say. The fashion company is one of many that already was struggling when COVID-19 laid waste to the retail sector. Efforts to find a buyer for the brands stalled in the spring of 2020, when the coronavirus pandemic hit, battering Collected’s finances. At the time, the company was getting back on its feet from a crippling software issue that impaired its ability to ship orders for months in 2017. Pandemic-driven mall closures left Collected with only three Joie stores in operation, in Newport Beach, Calif.; Greenwich, Conn.; and Boston. Efforts to sell the brands restarted this year, as did talks with landlords, but Collected was out of cash and unable to reach deals with anyone but its secured lenders. KKR and Callodine Commercial Finance LLC are Collected’s secured lenders, owed an aggregate of more than $185 million, court papers said.

Hertz Global Holdings Inc.​​ said it chose an “enhanced” offer from Centerbridge Partners, Warburg Pincus and Dundon Capital Partners to provide equity capital for the rental-car company’s exit from chapter 11, Bloomberg News reported. The deal, which is subject to bankruptcy court approval, has the support of holders of more than 85% of the company’s unsecured notes, Hertz said, a level of backing that gave it a “clear advantage” over a competing offer. The company earlier received a rival proposal from Knighthead Capital Management and Certares Management. “We look forward to emerging from chapter 11 in the second quarter financially and operationally stronger, and well-positioned to achieve the opportunities in the rebounding travel market,” Paul Stone, Hertz’s chief executive officer, said in the statement Saturday. The company remains on track to exit from its bankruptcy in June. The announcement comes a day after the U.S. Centers for Disease Control and Prevention said vaccinated individuals don’t need a COVID test and don’t need to quarantine when traveling domestically. Hertz filed for bankruptcy in May when the near-total shutdown of the global travel industry sent its rental revenues plunging. It became a popular stock among day traders, who sent shares of the bankrupt company soaring against conventions. Hertz made a short-lived effort to raise funds after its bankruptcy filing by selling stock, but abandoned it after the U.S. Securities and Exchange Commission questioned the plan. The supporting noteholders have agreed to support the exchange of the unsecured funded debt claims against Hertz for about 48.2% of the equity in the reorganized company and the right to purchase an additional $1.6 billion of equity. They have also committed to purchase, or otherwise backstop, the full $1.6 billion of equity being offered to the holders of Hertz’s unsecured funded debt.