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Shopping mall owners CBL & Associates Properties Inc. and Pennsylvania Real Estate Investment Trust are facing determined opponents to the companies’ respective bankruptcy restructuring plans, WSJ Pro Bankruptcy reported. CBL, one of the largest mall owners in the country, filed for bankruptcy on Sunday hoping to convert bondholders to owners but has a fight on its hands with its bank lender, Wells Fargo Bank NA, which isn’t on board, CBL lawyer Ray Schrock said at a court hearing on Monday. Likewise, PREIT—which also filed for bankruptcy Sunday—reached agreement on a restructuring with nearly all major creditors, save for one opponent that said the company’s proposal does virtually nothing to improve the balance sheet and is destined to end in another bankruptcy. “This company filed for bankruptcy with a deal with its bondholders and a fight with its bank lenders,” said Michael Stamer, a lawyer for the CBL bondholders that agreed to convert some debt to equity, during Monday’s court hearing. After CBL’s bondholders sent a restructuring proposal to Wells Fargo, the bank declared a default against the company and proceeded to step in to collect rent itself at some of the company’s properties, according to CBL’s court filings.

J.C. Penney Co. cleared the way to sell itself out of bankruptcy to lenders and landlords, settling with a group of holdout creditors led by Aurelius Capital Management LP that wanted a bigger share of value from the restructuring, the Wall Street Journal reported. The settlements resolved objections to a planned restructuring under which the department store chain’s retail operations and most of its stores will be acquired by landlords Simon Property Group Inc. and Brookfield Property Partners LP for roughly $800 million. As part of the proposed deal, top lenders agreed to buy the remaining stores in return for forgiving $1 billion of Penney’s $5 billion in debt while leasing the locations to Simon and Brookfield. Other lenders including Aurelius had opposed the company’s proposed breakup, arguing it would funnel a disproportionate amount of value to a subset of participating lenders led by H/2 Capital Partners LLC. The settlement announced Monday brings “widespread consensus” to the bankruptcy case and positions Penney to complete the restructuring sale well ahead of the holiday shopping season, the company said in court papers. Simon and Brookfield beat out competition from private-equity firm Sycamore Partners Inc. and Saks Fifth Avenue owner Hudson’s Bay Co. to acquire Penney’s retail assets.

Pittsburgh-based GNC Holdings LLC announced that it completed its chapter 11 bankruptcy plan of reorganization and that it will begin to "wind-down the affairs of the remaining bankruptcy estates," pay allowed claims and resolve those in dispute, the Pittsburgh Business Times reported. On Oct. 7, GNC had a substantial amount of its assets acquired in a $770 million sale to Harbin Pharmaceutical Group Holding Co., its largest shareholder, which let GNC improve its financial standing following adjustments it made to its store footprint and restructuring plan. The company plans to continue providing "innovative wellness solutions to customers" and that the chapter 11 plan and sale to Harbin will allow the company to continue to expand.

AMC Entertainment Holdings Inc.’s executives are focused on raising enough capital to keep the struggling theater chain afloat until summer, when they believe a COVID-19 vaccine and a backlog of blockbuster films will reverse its fortunes, Bloomberg News reported. The world’s largest cinema chain said yesterday that it has enough cash to last until early 2021, assuming attendance remains at its current, modest level. Chief Executive Officer Adam Aron said he’s talking with more than a dozen strategic investors about potential equity investments, as well as current lenders to shore up its liquidity until summer. “It all really comes down to one thing: We believe that we will need to raise more capital,” Aron said on a call with analysts after reporting a third-quarter loss of $905.8 million, or $8.41 a share. The Leawood, Kansas-based company said yesterday that its revenue tumbled to $119.5 million in the third quarter, plunging from almost $1.32 billion a year ago. While it has reopened 540 of its 600 locations in the U.S., they’re typically no more than 20 percent full and operating only on the weekends to save money.

Mall owner CBL & Associates Properties Inc. filed for court protection from creditors, following some of its biggest tenants into bankruptcy after the pandemic kept consumers at home, forcing many retailers already weakened by e-commerce to quit paying rent, Bloomberg News reported. The filing in the Southern District Court of Texas will give the company a chance to keep operating while reorganizing its finances and business. It listed estimated assets at about $1 billion to $10 billion, and estimated liabilities at around the same amount. Some of CBL’s biggest renters, including J.C. Penney Co. and Ascena Retail Group Inc. have already filed for bankruptcy with plans to close stores. Analysts have long predicted a shakeout in malls and strip shopping centers serving less affluent areas, which dominate CBL’s roster. CBL previously warned investors it was in trouble because tenants weren’t paying their rent. As of mid-August, the Chattanooga, Tennessee-based company managed 108 properties in 26 states. Read more.

Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store. 

PREIT, the troubled owner of malls throughout the region including Center City’s Fashion District Philadelphia, filed a pre-packaged Chapter 11 bankruptcy yesterday aimed at unlocking $150 million in new borrowing, the Philadelphia Inquirer reported. PREIT, whose initials stand for Pennsylvania Real Estate Investment Trust, said in a news release that it will continue operations without interruption while it obtains necessary approvals for the plan. The Chapter 11 petition comes about two weeks after the company first outlined the restructuring plan, saying it aimed to avoid a bankruptcy filing by persuading all of its lenders to back the proposal. It ultimately received support from 95 percent of its creditors, it said in the release. “With the overwhelming support of our lenders, we look forward to quickly emerging from this process as a financially stronger company with the resources and support to continue creating diverse, multiuse ecosystems throughout our portfolio,” PREIT chief executive Joseph F. Coradino said. Under the deal, PREIT would put up properties that it owns free and clear as collateral for its $919 million in existing unsecured debt and the $150 million in new borrowing. That would mean PREIT’s lenders could foreclose on those properties if it defaulted. PREIT is the biggest mall owner in Philadelphia and its surrounding counties, with 4.7 million square feet of space under management in the region, according to market tracker CoStar Group.

Friendly’s Restaurants LLC, an iconic chain on the East Coast of the U.S. known for its sundaes, became the latest dining institution to go bankrupt amid the pandemic, Bloomberg News reported. The company filed for chapter 11 protection in Delaware yesterday, according to a filing. It listed estimated liabilities of $50 million to $100 million, and estimated assets of $1 million to $10 million. FIC Restaurants Inc., which operates the Friendly’s brand, will sell substantially all of its assets to Amici Partners Group, according to a press release. Nearly all of Friendly’s 130 corporate-owned and franchised restaurant locations will likely remain open subject to pandemic limitations, it said. This isn’t the brand’s first brush with bankruptcy. In 2011, Friendly Ice Cream Corp. and its subsidiaries, the operator of Friendly’s restaurants and a nationwide distributor of ice cream products, had entered chapter 11. 

Revlon Inc.’s effort to escape having to file for bankruptcy is pitching two Wall Street billionaires toward a showdown, WSJ Pro Bankruptcy reported. The cosmetics company, majority-owned by billionaire Ron Perelman’s MacAndrews & Forbes Inc., is working to ward off bankruptcy and protect the company’s equity by pressuring bondholders to swap out their holdings for roughly a third of their face value, in exchange for getting cash or a mix of cash and new debt. The company is at risk of chapter 11 if certain bonds are still outstanding by mid-November, triggering the accelerated repayment of other Revlon debts. Activist investor Carl Icahn owns enough of the company’s bonds to potentially derail efforts by Revlon to complete the proposed bond exchange, which would lighten the company’s debt load and avoid the need for an imminent chapter 11 filing. Icahn hasn’t participated in the transaction, out of concerns the offer doesn’t include sufficient returns for bondholders.

Supply-chain bottlenecks caused by a crush of imports heading into U.S. seaports are pinching retailers’ efforts to stock up as consumers pick up their spending, the Wall Street Journal reported. Executives at Steve Madden Ltd. and Crocs Inc., merchants known for their footwear, both said in their third-quarter reports this week that they were hit by logistics delays in getting goods to distribution centers and stores heading into a critical selling season. “There was sort of a limited supply or a challenge getting containers and vessels, which slowed things down overseas,” Steve Madden Chief Executive and Chairman Ed Rosenfeld said on the company’s earnings call on Tuesday. He said operations at the company’s warehouses and those of its wholesale customers also “have been slower just due to some labor shortages and other disruption due to Covid.” Container shipping lines canceled hundreds of sailings this spring and summer as coronavirus-driven lockdowns sent national economies reeling and global trade withered. But demand snapped back strongly over the summer after businesses reopened and retailers rushed to restock inventories to get goods in place for a hoped-for rebound in the fall.

Hertz Global Holdings Inc. soon plans to line up a $4 billion financing package to refresh its vehicle fleet, on top of a $1.65 billion loan to carry itself through bankruptcy, WSJ Pro Bankruptcy reported. The rental-car company, which filed for chapter 11 in May, received permission from the U.S. Bankruptcy Court in Wilmington, Del., on Thursday to begin tapping a $1.65 billion loan to help it operate through 2021. Some of that money could be used to buy cars, with the rest earmarked for other corporate purposes. Hertz has been liquidating parts of its fleet, cutting the number of vehicles it leases from banks and bondholders to adapt to slumping demand during the coronavirus pandemic. But the company is also in the market for new models as aging vehicles are sold off. During a court hearing Thursday, Hertz lawyer Tom Lauria said, “We need to start ordering new vehicles.” The $1.65 billion bankruptcy loan will help, but Hertz needs more financing from asset-backed securities, Lauria said. Hertz hopes to get commitments for the additional $4 billion in ABS financing in coming days, he said.