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Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.) yesterday criticized new Treasury Department guidance about the tax treatment of expenses related to Paycheck Protection Program (PPP) loans, asking the department to revisit its approach, The Hill reported. "We encourage Treasury to reconsider its position on the deductibility of these expenses, and the timing of those deductions, to provide relief to the small businesses that need it most,” Grassley and Wyden said in a statement. The PPP is a coronavirus relief program under which small businesses received loans that can be forgiven if the proceeds are used to maintain payroll. The legislation that created the PPP includes a provision stating that the loan forgiveness is not considered taxable income. Under guidance Treasury and the IRS issued on Wednesday, if a business hasn't had its PPP loan forgiven at the end of the year but expects the loan to be forgiven in the future, the company cannot deduct expenses related to the loan, even if the business hasn't yet filed for forgiveness. The guidance follows a notice Treasury and the IRS issued in the spring stating that expenses associated with loan forgiveness under the PPP are not deductible.

Two entrepreneurs who have been collecting fallen retail brands during the coronavirus pandemic are taking over the reins of RadioShack, acquiring the nearly century-old gadget seller’s brands and online business, WSJ Pro Bankruptcy reported. Miami-based Retail Ecommerce Ventures LLC, led by Chief Executive Alex Mehr and Executive Chairman Taino “Tai” Lopez, bought the rights to the RadioShack brand in the U.S., Canada, India, Australia, Europe and China, along with related websites, for an undisclosed price last week. Even as U.S. retail sales climbed in October at their slowest pace since the spring, online shopping continues to flourish. Consumers are demanding improved residential workspaces and remote-working setups as the pandemic keeps many of them out of the office, opening the door for RadioShack to fulfill their work-at-home electronics needs. The deal marks REV’s latest purchase of a retail brand since COVID-19 began spreading in the U.S. Earlier this year, the company bought the e-commerce business of Pier 1 Imports Inc. and the trademark assets of Modell’s Sporting Goods out of bankruptcy.

Wendy’s Co. disclosed yesterday that it has submitted a bid to buy nearly 400 restaurants under its own name and operated by bankrupt franchisee NPC Quality Burgers Inc., Reuters reported. NPC filed for bankruptcy protection in July and started a process to sell its assets, including its interests in Wendy’s restaurants across eight different markets. Wendy's said that it remains committed to maintaining its ownership level at about 5 percent of the total Wendy's system. The burger chain expects several existing and new franchisees, part of the consortium bid, to buy most of the NPC markets, with Wendy's buying one or two at most. Wendy’s did not disclose the size of the consortium bid. NPC Quality Burgers’ parent, NPC International Inc, earlier this month said restaurant franchisee Flynn Restaurant Group LP had agreed to buy all of its more than 1,300 Pizza Hut and Wendy’s restaurants. Wendy’s filed an objection last week to the sale of NPC International’s assets to Flynn, saying the bidder also operates a few of its competitors’ restaurants.

Unsecured creditors of Rubio’s Restaurants Inc. said that the bankrupt fish taco chain and key lender Golub Capital LLC took actions to manufacture a cash crunch and loot the company, WSJ Pro Bankruptcy reported. A committee of unsecured creditors filed papers in the U.S. Bankruptcy Court in Wilmington, Del., on Tuesday objecting to Rubio’s request for financing designed to carry the Carlsbad, Calif.-based company through the chapter 11 proceedings. In the filing, the committee said that in many so-called prepackaged bankruptcies, junior creditors recoup much of what they are owed. In Rubio’s case, however, they are threatened with little or no recoveries. Rubio’s and Golub developed a strategy that would essentially loot assets that previously weren’t used as collateral, the committee said, leaving nothing for unsecured creditors. Golub Capital, Rubio’s top secured lender, owns a stake in the company in addition to $72 million in debt. Under the company’s restructuring proposal, Golub agreed to provide bankruptcy financing while swapping some secured debt into equity.

U.S. retail sales increased less than expected in October and could slow further, restrained by spiraling new COVID-19 infections and declining household income as millions of unemployed Americans lose government financial support, Reuters reported. Retail sales rose 0.3 percent last month, the smallest gain since the recovery started in May, after increasing 1.6 percent in September, the Commerce Department said. They account for the goods component of consumer spending, with services such as healthcare and hotel accommodation making up the other portion. Sales were supported by Amazon.com's "Prime Day" event, with online receipts surging 3.1 percent. "Prime Day" is normally in July and some economists said this could have thrown off the model that the government uses to strip seasonal fluctuations from the data, leading to the modest sales gain. Consumers bought motor vehicles at a much slower pace than in previous months. There were increases in sales of electronics and appliances, as well as building materials and garden equipment. But households cut back spending on sporting goods and hobbies, clothing, furniture, drinking and dining out.

About 300 companies that received as much as half a billion dollars in pandemic-related government loans have filed for bankruptcy, according to a Wall Street Journal analysis of government data and court filings. Many of the companies, which employ a total of about 23,400 workers, say that the funds from the Paycheck Protection Program weren’t enough to keep them going as the coronavirus and lack of additional stimulus payments weighed on their businesses. The total number of companies that failed despite getting PPP loans is likely far higher. The Journal only analyzed the big borrowers from the program, which accounted for about half of the overall loans though only about 13.5 percent of the total participants. And many small businesses simply liquidate when they run out of cash rather than file for bankruptcy. The government awarded a total $525 billion in PPP loans to 5.2 million companies since April, according to the Small Business Administration. The SBA has only released data on the largest borrowers, which the Journal linked to bankruptcy filings. The total amount lent to companies that went bankrupt is between $228 million and $509 million—the government publishes a range for the loan amounts. Half of the 285 firms identified by the Journal have filed for bankruptcy since August. Dozens of recipients, which come from nearly every state, cited the pandemic as a primary reason for entering bankruptcy.

In just a matter of days, America’s long effort to revive its virus-battered economy has been put on pause across much of the country as new infections soar at the fastest pace since the pandemic’s earliest days, Bloomberg News reported. California yesterday reinstituted bans on many indoor businesses across the state, and its governor warned he may impose a curfew. Michigan has ordered a three-week partial shutdown, while states including Oregon, Washington and New Jersey tightened curbs. Even the governor of Iowa, long resistant to virus rules, issued a limited mask mandate yesterday. The new restrictions follow a rapid surge in cases -- with the country adding a million infections in the first 10 days of November alone -- that has led health officials to issue dire warnings about the prospect of uncontrollable outbreaks as the Thanksgiving holiday approaches. In a call with governors yesterday, Deborah Birx, a key member of the White House’s coronavirus task force, said the increase is showing no signs of a plateau and that nursing homes, in particular, are being hard-hit.