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Since COVID-19 sparked government-ordered shutdowns in March, judges have dismissed more than four times as many business-interruption lawsuits as they’ve allowed to proceed, according to a preliminary analysis by the University of Pennsylvania Law School. But some plaintiffs are finding weak spots in the industry’s legal defenses, Bloomberg News reported. Christopher Walker, an Orlando doctor, is one of them. Though his policy — like many — contained a provision that Sentinel Insurance Co. contends excluded virus claims, Walker’s lawyer argued that the language used was ambiguous. A federal judge agreed, keeping the case alive after Sentinel sought a dismissal of the suit brought on behalf of Walker’s practice, UroGyn Specialists of Florida. The stakes are high for thousands of businesses. The outbreak has led to a surge in U.S. bankruptcies, including rental-car company Hertz Global Holdings Inc. Century 21 Stores said that it couldn’t survive after its insurer denied its business-interruption claim. But the pandemic is also squeezing insurers. In the second quarter — after the initial shutdowns — Chubb Ltd. reported $1.16 billion in COVID-19 losses. Munich Re said this month that coronavirus losses keep growing. Overall, the industry could face at least $100 billion in total underwriting losses from the pandemic, Lloyd’s of London predicted in May.

Brenna Hogan got word in late October that the latte-colored satin bridesmaid gown she ordered from Brideside Inc. was ready. But her appointment to pick it up from a showroom in Chicago’s West Loop neighborhood was quickly canceled. She didn’t hear from the wedding apparel retailer again until last week when the business emailed her that it had permanently closed, WSJ Pro Bankruptcy reported. Calls and emails about picking up the dress went unanswered, she said. As if weddings during a pandemic aren’t hard enough, Brideside’s sudden shutdown after eight years in business has become another headache for Ms. Hogan and other brides and bridesmaids trying to navigate nuptials amid restrictions on some businesses and social gatherings. Some customers who put down money were left scrambling after finding out their orders had never been placed with dress designers. They are disputing their Brideside credit- and debit-card charges, hoping to reclaim their money while trying to secure the same dress directly with the designer. Brideside said in its email to customers that with about two-thirds of weddings canceled this year and an uncertain 2021, its “chapter has come to an end.” Saying it wasn’t able to field inquiries, Brideside instead referred customers to more than a dozen of its dress designers.

U.S. shoppers went online to purchase holiday gifts and score Black Friday deals they once crowded into malls to grab, as the coronavirus pandemic accelerated the yearslong remaking of the U.S. retail landscape, the Wall Street Journal reported. Roughly half as many people visited stores on Black Friday as they did last year, according to research firms that track foot traffic. Meanwhile, online spending jumped 22 percent from a year ago, making it the second-best online shopping day ever measured by Adobe Analytics. It is unclear whether an early start to the holiday shopping season, the online Black Friday surge and an expected record day on Cyber Monday will be enough to offset the money lost from in-person shopping for many chains. Heading into the critical season, U.S. consumer spending has been strong despite the economic shocks and shutdowns tied to COVID-19. The National Retail Federation, a trade group, has forecast that holiday sales will increase at least 3.6 percent to about $755 billion, including at least 20 percent growth from online shopping to about $202 billion.

J.C. Penney is almost at the end of its bankruptcy after getting a verbal confirmation Tuesday of its plan from Bankruptcy Judge David Jones, the Dallas Morning News reported. That plan of reorganization includes the sale of the retail company to landlords Simon and Brookfield and a big chunk of its real estate to lenders to pay down debt. The pending transaction includes a complex document for the transfer of 160 stores and six distribution centers to Penney’s lenders. Penney’s shareholders continued to object to the plan’s treatment of their rights to future claims, their lawyer Mathew Okin said at the hearing. In response, Judge Jones granted shareholders pre-petition claim status, giving them future rights if they pursue a legal case. The judge deemed himself the gatekeeper of that status but noted that any shareholder claims would be dwarfed by creditors who have agreed to the plan of reorganization. Penney’s shareholders are holding stock with no value but haven’t accepted that the bankruptcy plan has canceled their equity. Judge Jones had allowed them to form an ad hoc equity committee and approved funds to pay fees for financial and legal assistance.

California Pizza Kitchen says that it has emerged from chapter 11 protection with $220 million less in debt and no lending obligations coming due in the near term, Restaurant Business reported. Earlier disclosures by the casual-dining chain indicate that the court-approved plan of reorganization leaves the brand with $177 million in borrowed capital for expansion and sharpening the chain’s focus on what it calls a “Cali health” menu. The new bill of fare includes such items as a BBQ Don’t Call Me Chicken Pizza, a meatless riff on its signature barbecue-chicken pie. The new version features a plant-based protein analog in place of chicken. The company retired its debt by swapping equity for what it owed lenders. Those former creditors now own substantially all of the operation, California Pizza Kitchen said. The operation had tried to sell itself via an auction last month, but no bidders came forward. The company filed for bankruptcy protection at the end of July, citing the impact of the pandemic. Sales had been sliding for at least two years beforehand, according to the researcher Technomic. CPK currently operates or holds the franchise rights to 240 restaurants in 10 countries.

There is widespread agreement that the $1.8-trillion economic recovery package that went into effect in March — the CARES Act — averted economic disaster after the coronavirus pandemic began, according to a Bloomberg commentary. With each passing month, the evidence mounts that the CARES Act performed better than even its strongest advocates thought it would. Perversely, its success is undermining the perceived need for Congress to provide additional support, according to the commentary. There are signs that the cushion is losing air. The pace of monthly job gains has slowed considerably since the spring. This fall, consumers pulled back on spending, and their confidence in the economy fell in November to a three-month low. The savings rate has fallen by 20 percentage points as households burn through their reserves. Lines at food banks are growing as nutritional insecurity worsens. If Congress does not pass another stimulus, then the first quarter of 2021 could easily see a shrinking economy and increasing unemployment. Deeper problems could take root. Millions of businesses could be wastefully lost. Labor demand could weaken over the medium term, keeping unemployment higher for longer. Read more. 

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

J.Crew Group replaced its chief executive after less than a year in the role, and just a few months after the apparel seller emerged from bankruptcy protection with new hedge-fund owners, the Wall Street Journal reported. Jan Singer, who took over as CEO in February, was replaced Tuesday by Libby Wadle, a longtime J.Crew executive. Neither of them was immediately available for comment. A person familiar with the matter described the change as a board decision meant to simplify the management structure. The two executives had split oversight of the company’s brands, with Ms. Singer overseeing J.Crew and Wadle running Madewell, its faster-growing business. J.Crew filed for bankruptcy protection in May, and emerged in September with a deal that cut its debt and handed ownership to a group of lenders, led by New York hedge fund Anchorage Capital Group LLC. Anchorage co-founder Kevin Ulrich became J.Crew’s chairman.

Recent coronavirus case spikes, new lockdowns and the expectation of minimal family outings during the holidays has turned a year of bad news for the country’s cinemas into an outlook that’s simply bleak, Bloomberg News reported. In early October, when Regal Cinemas shuttered all 500-plus locations nationwide, that darkened more than 7,000 screens alone. The industry has already seen a cinema cull in the U.S., per the National Association of Theatre Owners, with the number of movie theaters shrinking from around 7,200 in 1996 to roughly 5,500 as of late 2019. But that may just be a preview. John Fithian, head of the National Association of Theatre Owners, told Variety that unless Congress passes the Save Our Stages Act, a bipartisan push to support concert venues and theaters that have seen their businesses decimated by Covid, “probably around 70% of our mid- and small-sized members will either confront bankruptcy reorganization or the likelihood of going out of business entirely by sometime in January.” In past economic downturns, theater owners tried stunts like “dish nights” — giving away different pieces of a table setting, such as a saucer or salad plate, to lure Great Depression patrons. That probably won’t work this time, leaving a lot of moviegoing real estate in need of a reboot. There’s a long tradition of adaptive reuse when it comes to the older generation of neighborhood moviehouses, many of which died off in the second half of the 20th century as new suburban multiplexes appeared. These smaller facilities often see a second life as community theaters, churches, gyms and bookstores. But modern multiplexes can be poor candidates for adaptive reuse, theater owners and real-estate experts told the Wall Street Journal, because of their sloped floors and subdivided spaces. That’s especially true at a time when the malls they are often attached to are struggling reinvent themselves. Closed theaters may fare better on the real estate market as available land in need of a demolition; a shuttered Regal Theater in North Charleston, S.C., for example, was simply demolished, with plans to build an apartment building in its place. Some developers do see sequel potential in modern movie theaters, though. Last year, PMB, a development firm focused on the medical field, turned a 1980’s multiplex in Goodyear, Arizona, into a collection of medical offices. And Walter Crutchfield, co-founder and partner of the Arizona development firm Vintage Partners, turned a Flagstaff movie theater into perhaps the country’s most creative department of motor vehicles.

Guitar Center Inc, the largest U.S. retailer of music instruments and equipment, filed for chapter 11 bankruptcy on Saturday, as music lovers moved their shopping online during the coronavirus pandemic, Reuters reported. The retailer has negotiated to have a total of $375 million in debtor-in-possession financing from its existing lenders and intends to raise $335 million in new senior secured notes, the company said. Earlier this month the company reached a restructuring agreement with key stakeholders that includes debt reduction by nearly $800 million and new equity investments of up to $165 million to recapitalize the company. The company in a court filing said it has between $1 billion and $10 billion of both assets and liabilities. Guitar Center, which owns nearly 300 stores across the country, said business operations will continue without any interruption.

Ruby Tuesday Inc. received speedy court approval for a sale process after the bankrupt restaurant chain made last-minute changes sought by major landlords, WSJ Pro Bankruptcy reported. The Maryville, Tenn.-based company filed for chapter 11 bankruptcy last month because of fallout from the novel coronavirus pandemic and continued pressure on the casual-dining sector. Judge John Dorsey of the U.S. Bankruptcy Court in Wilmington, Del., on Friday approved the bidding procedures for its assets. The company said last month that lenders Goldman Sachs Group Inc. and TCW Group Inc. could be the lead bidders as the business seeks to reorganize. But it also said it would court other potential buyers to generate greater proceeds for creditors. The deadline for Ruby Tuesday to pick a stalking-horse bidder is Dec. 10. Stalking-horse bidders help set a starting price for the sale. Other qualified bids are due Jan. 14, which is a week later than the original proposed date. If necessary, an auction would occur Jan. 19.