Reporting from Bloomberg indicates that April 2020 consumer spending in the United States dropped 13.6% from March, which is the sharpest month-over-month drop in approximately 60 years’ worth of consumer spending data maintained by the Commerce Department. [Bloomberg; May 29, 2020]
The Wall Street Journal reports that 24 Hour Fitness Worldwide Inc. is seeking a financing package in order to stave off a bankruptcy filing until July of 2020. The Company, which was reportedly struggling prior to the COVID-19 pandemic, plans to close underperforming locations as part of its restructuring efforts. [WSJ; May 28, 2020]
On May 26, 2020, the United States Supreme Court denied a petition for certiorari by creditors in ISL Loan Trust, et al. v. Millennium Lab Holdings, et al., which was decided by the Third Circuit in December of 2019. The Third Circuit’s opinion, which was discussed by members of Mayer Brown’s restructuring group in a January 2020 client alert, held that bankruptcy courts have the constitutional authority, well within the constraints of Stern v. Marshall, to confirm Chapter 11 reorganization plans containing nonconsensual third-party releases. [SCOTUS; May 26, 2020]
Judge Keith L. Phillips of the United States Bankruptcy Court for the Eastern District of Virginia entered an order extending the time in which J. Crew and its affiliated debtors must perform under all of their existing leases by 60-days through July 3, 2020. The order was entered over objections from creditors that such relief was unwarranted as many regions of the United States have started reopen following widespread COVID-19 related closures. [In re Chinos Holdings Inc., et al.; May 26, 2020]