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The slow resolution of the presidential election, and the growing chance that Democrats and Republicans will divide power in Washington, D.C., next year, has revived lawmaker interest in reaching an agreement on a new economic rescue package before Christmas, the New York Times reported. Senate Majority Leader Mitch McConnell (R-Ky.) said on Wednesday that reaching a deal on a stimulus bill would be “Job 1” when lawmakers return for the lame-duck congressional session after the elections. It is possible that some type of stimulus package could be attached to a bill that would fund the federal government past Dec. 11 — legislation that will be necessary to avoid a government shutdown. The chance of a stimulus deal may be rising, but it is unlikely to result in as large a package as Democrats and President Trump were discussing before the election. Democratic leaders, including Speaker Nancy Pelosi (R-Calif.), had been talking with the White House about a nearly $2 trillion package that would include direct payments to households, loans for small businesses, and money for schools and state and local governments, as well as expanded coronavirus testing. Senate Republicans were pushing a bill that would have cost well under $1 trillion, possibly as little as $500 billion. Whether a stimulus package becomes reality will depend on several variables, including whether Mr. Trump, whose re-election prospects are fading, is willing to sign a bill. The stakes of the negotiations are also expected to remain murky until it becomes clear which party will control the Senate.

Congress should pass a new economic-relief package this year, Senate Majority Leader Mitch McConnell said on Wednesday, as prospects for Democrats’ multitrillion-dollar stimulus bill faded along with their chances for full control of the government, the Wall Street Journal reported. Lawmakers have been deadlocked for months over further aid, with Republicans insisting on liability protections for businesses and Democrats seeking aid for state and local governments. With the outcome of Tuesday’s elections still in doubt, McConnell (R-Ky.) signaled that he would try to move this year, with President Trump assured of still being in office for at least that time. “We need another rescue package,” McConnell said. “Hopefully the partisan passions that prevented us from doing another rescue package will subside with the election. We need to do it, and I think we need to do it before the end of the year. McConnell said he would support including more funding for schools, hospitals and a popular small-business loan program, but not a more sweeping proposal that Democrats have sought. He also noted that Congress will have to move to keep the government running before its current funding expires on Dec. 11. McConnell said that he and House Speaker Nancy Pelosi (D-Calif.) agreed to pass full-year spending bills in December.

The Small Business Administration is quietly rolling out an effort to scrutinize the largest businesses that took payroll support loans during the pandemic, demanding new details about their operations to justify the aid, Politico reported. The SBA last week began to circulate "loan necessity" questionnaires aimed at companies and nonprofits that took forgivable Paycheck Protection Program loans worth $2 million or more. The agency declined to comment on the forms and issued no public announcement beyond a brief Federal Register notice marking their release, but copies were obtained by Politico. The questions posed by the SBA have rattled banks, which issued the loans and would be responsible for delivering the questionnaires to the agency, as well as accountants for PPP borrowers. They say it's another "gotcha" moment in a program that has been subject to shifting rules and expectations since its hurried launch in April and could create major new complications for businesses that took advantage of the aid. The loans were originally designed to be forgiven if borrowers agreed to maintain payroll. The new questions for businesses in the nine-page questionnaire — which the SBA said borrowers must complete within 10 business days of receiving it — ask for details on quarterly revenue, capital expenditures, dividend payments and whether any employees earned more than $250,000.

Faced with the worst business interruption in living memory, the insurance giants have, by and large, refused to pay business-interruption claims, Bloomberg News reported. U.S. plaintiffs’ lawyers have filed more than 1,100 complaints against insurers, according to a tally by Tom Baker, a law professor at the University of Pennsylvania. Business owners from small restaurants to major retailers say that they could go bankrupt unless they’re paid. Insurance companies say the payouts could cripple them — one industry estimate looking at just U.S. small businesses with fewer than 100 employees places the total monthly cost of reimbursing their pandemic losses at between $52 billion and $223 billion. The dispute is also playing out in Congress and state legislatures, where bills have been introduced requiring insurers to pay for pandemic-related losses. “The word ‘unprecedented’ is probably overused in this, but I don’t think I have another word for it,” says Henry Daar, an executive vice president who oversees property claims for insurance broker Willis Towers Watson. “There have been huge insurable events in the past, with billions of dollars at issue. All of those involved situations that affected a discrete area and a discrete number of companies. This pandemic has affected everybody.” 

The Federal Reserve on Friday widened the terms of its Main Street lending program for small businesses struggling during the coronavirus crisis, as the chances of another round of stimulus help for businesses appears increasingly unlikely in the next few weeks, the Washington Post reported. On Friday, the central bank lowered the threshold for loans that businesses can apply for from $250,000 to $100,000. The Fed also tweaked rules about the degree to which prior loan help from the federal government can be counted in a company’s application, with an eye toward trying to make the Main Street lending program more accessible to small and midsized businesses. The changes come as scores of American businesses are waiting for lawmakers to cut another stimulus deal, which could include an additional round of grants from the Paycheck Protection Program. Months of fraught negotiations between the White House and House Democrats have prompted some to ask what more the Federal Reserve could do to expand the reach of its emergency programs — particularly the Main Street lending facility. The Main Street lending program, which has the capacity to issue up to $600 billion in loans, has so far made almost 400 loans totaling $3.7 billion. The program has been widely criticized for having onerous loan terms, and there are ongoing debates about how much risk the program should take on given that losses are ultimately covered by taxpayer dollars. But even now, hundreds of billions of dollars set aside by lawmakers to cover losses from the Fed’s emergency facilities are going untapped.

Senate Majority Leader Mitch McConnell (R-Ky.) said that he expects Congress to move another coronavirus relief package “right at the beginning” of 2021, breaking from Speaker Nancy Pelosi (D-Calif.), who told reporters Thursday she wants to get a deal in the lame-duck session, The Hill reported. “We probably need to do another package, certainly more modest than the $3 trillion Nancy Pelosi package. I think that’ll be something we’ll need to do right at the beginning of the year,” McConnell said on Friday. “We could target it particularly at small businesses that are struggling, and hospitals that are now dealing with the second wave of the coronavirus, and of course the challenges for education, both K-12 and college,” the GOP leader said. McConnell offered a slower timeline than other lawmakers, who expect a deal to move after the election but before the end of the year or before the end of President Trump’s first term in January. Pelosi told reporters on Thursday of her expectation of reaching an agreement with the Trump administration in the lame-duck session.

Many small businesses are using a new part of the Bankruptcy Code to discharge their debts amid the COVID-19 crisis, and bankruptcy experts are encouraging other ailing small businesses to consider the option instead of shutting down entirely, CFO.com reported. More than 1,000 small businesses have elected to file under subchapter V, established this year by the Small Business Reorganization Act, in 2020 according to statistics cited yesterday in a session of Insolvency 2020 Virtual Summit. Part of the reason might be the enhancement to Subchapter V in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. CARES temporarily raised the ceiling on a filer’s aggregate secured and unsecured non-contingent and liquidated debt to $7.5 million from $2.7 million. The higher debt limit is scheduled to end on March 27, 2021. “[Subchapter V] is tailor-made for small businesses that can survive COVID and come out on the other end,” said Deirdre O’Connor, a managing director at Epiq Global. The bankruptcy bar and the courts are expecting more such cases to be filed in 2020, as Paycheck Protection Program funds are exhausted. Read more.

SBRA: A Guide to Subchapter V of the U.S. Bankruptcy Code, written by distinguished judge Paul W. Bonapfel (U.S. Bankruptcy Court, N.D., Georgia), is a free ebook offering an analysis of the new Subchapter V of the Bankruptcy Code, as well as insights into the emerging case law. Download it here.

Retailers, pharmacies, liquor stores and other merchants across the U.S. are gobbling up insurance that protects buildings from damage caused by societal unrest, worried about possible street violence after the U.S. presidential election, insurers and brokers told Reuters. Many shops and offices are facing double-digit premium hikes for such policies but buying them anyway because the cost of not doing so might be higher, industry sources said. Sales of commercial policies that cover damage from societal unrest in the United States have already doubled in October from September levels, insurers and brokers said. That is partly because some providers, mainly in the Lloyd’s of London marketplace, stopped including “strikes, riots and civil commotion” coverage within general property policies for businesses such as retailers and pharmacies that were already hard-hit by civil commotion, forcing them to buy separate insurance, said a person familiar with the matter, who was not authorized to speak to the media about client policies.