What We’re Reading This Week [March 29, 2021] – Insolvency/Bankruptcy/Re-structuring

United States: What we read this week [March 29, 2021]

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The American Bankruptcy Institute reported that President Biden enacted the “COVID-19 Bankruptcy Relief Extension Act” on Saturday March 27, 2021, which runs until March 27, 2022, with provisions giving financially troubled consumers and small businesses greater access to bankruptcy relief. The provisions were included in the original CARES law which was passed in the wake of the Covid-19 outbreak and was originally scheduled to expire this month. [ABI; March 29, 2021].

The Wall Street Journal Remarks that, perhaps counterintuitively, the number of people seeking bankruptcy protection has fallen sharply over the past year. Chapter 7 claimants fell 22% in 2020 from 2019, and Chapter 13 claimants fell 46% from 2019. In addition, individual bankruptcy filings have remained below 40,000 per month since last March when the pandemic began. The data suggests the drop in individual returns may be attributable, in part, to government moratoria on evictions, foreclosures, and student loan obligations. Conversely, commercial bankruptcy filings increased by 29% in 2020, according to the same data.
[WSJ; March 29, 2021].

Bloomberg reports that several banks are suffering significant losses due to the fallout from recent massive margin calls on Archegos Capital Management. Margin calls led to the forced liquidation of several important Archegos positions, sending shock waves through the capital markets. [Bloomberg;
March 29, 2021].

The Wall Street Journal also reports a well-known troubled debt investment fund is betting the travel industry will recover from the pandemic by spending around $ 600 million to acquire 15 hotels, such as the Queen Mary in Long Beach, Calif. and the Crowne Plaza in Orlando, Florida. The struggling investor is also positioned to acquire retail space in the renovated George Washington Bridge bus station in upper Manhattan. These deals come as tourism and travel resume as Covid-19 vaccine rollout continues in United States [WSJ; March 26, 2021].

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