What We’re Reading This Week [July 5, 2021] – Insolvency/Bankruptcy/Re-structuring

United States: What we read this week [July 5, 2021]

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CNBC analyzes the latest employment report from the Department of Labor, which showed 850,000 jobs won in the United States in June, far more than economists expected. The hospitality sector, especially bars and restaurants, accounted for the largest share of employment gains, with education and professional services also seeing an increase in employment. The article notes that hiring has accelerated as Americans continue to “return to normal” and GDP growth for the second quarter of 2020 could end up approaching a staggering 10%. [CNBC; July 2, 2021]

The Wall Street Journal discusses the resurgence of coal as an energy source. Electricity consumption has increased as many countries recover from the worst of the pandemic, and the shift to electric vehicles has further increased demand. With the rising prices of alternatives like natural gas and renewables still unable to meet demand, countries are turning to coal as a reliable energy source to meet consumer needs and avoid blackouts.
[Wall Street Journal; July 7, 2021]

Yahoo finance shares Bloomberg reporting on Hertz’s exit from Chapter 11 after thirteen months of litigation in bankruptcy court. Taking advantage of soaring used car prices and competition among investors to finance the reorganized entity, Hertz was able to emerge from bankruptcy with a healthy balance sheet, paying off its bondholders in full. In addition to being a success for the car rental company and its creditors, shareholders, especially “Reddit traders” who continued to buy Hertz shares as the company said its equity was likely worthless. , benefit from the receipt of cash, shares in the reorganized company. In particular, since the start of trading in the new share, the Hertz share price has been well above the $ 13.50 exercise price of the stock warrants, a potential windfall for these. shareholders. [Yahoo Finance; June 30,
2021]

In other post-bankruptcy news, The Wall Street Journal discusses Authentic Brands’ upcoming IPO. Over the past two years, Authentic Brands has partnered with mall owner Simon Property Group to acquire a variety of retail brands outside of their bankruptcy proceedings. At a time when brick and mortar retailing is in decline, Authentic Brands is betting on better fortunes for the formerly bankrupt retailers in its portfolio, including Brooks Brothers, Nine West, Forever 21 and JCPenney. [Wall Street
Journal; July 7, 2021]

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