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California Regulator Approves PG&E's Chapter 11 Reorganization Plan

PG&E Corp. said yesterday that its chapter 11 reorganization plan has been confirmed by a California power regulator, bringing the power provider one step closer to emerge from bankruptcy and participate in a state-backed wildfire fund, Reuters reported. The decision by the California Public Utilities Commission (CPUC) also approved the company’s request to issue new debt and securities to finance its exit from bankruptcy, PG&E said in a statement. The San Francisco-based utility had filed for chapter 11 bankruptcy protection in January last year, citing potential liabilities exceeding $30 billion from major wildfires sparked by its equipment in 2017 and 2018. The company needs to exit bankruptcy by June 30 to participate in a state-backed wildfire fund that would help reduce the threat to utilities from wildfires. The power provider has had a tumultuous phase since the filing, with CPUC having asked the company in April for governance and oversight changes to its reorganization plan. Governor Gavin Newsom too had previously raised concerns about the plan.

End to Alta Mesa Bankruptcy Begins as Liquidation Plan Approved

Alta Mesa Resources Inc. received court confirmation of its chapter 11 plan of liquidation, marking the beginning of an end to a tumultuous bankruptcy, Bloomberg Law reported. The approval will let the company wind down its affairs after it was forced to sell most of its assets at a steep discount due to Covid-19 and a collapse in oil prices. Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas confirmed the plan for Alta Mesa and its affiliates after a hearing Wednesday. The plan “was overwhelmingly accepted” by every class of creditors and the company resolved a dozen objections, Caroline A. Reckler of Latham & Watkins LLP, an attorney for Alta Mesa, told the court. The plan appoints a plan administrator and a litigation trustee to efficiently wind down the estates, Robert Albergotti, the company’s chief restructuring officer, said in a declaration filed with the court. The wind-down budget provides sufficient funds to pay all administrative claims, Albergotti said. Judge Isgur on Wednesday also confirmed the plan and company disclosures of Alta Mesa subsidiary Kingfisher Midstream, LLC, which followed Alta Mesa into bankruptcy in January.

24 Hour Fitness Seeks Bankruptcy Loan as Gym Shutdowns Drag On

Midprice gym chain 24 Hour Fitness Worldwide Inc. is seeking a financing package to stay afloat through a possible bankruptcy filing that could come within weeks, WSJ Pro Bankruptcy reported. The company, which is based in San Ramon, Calif., and is owned by private-equity firm AEA Investors and the Ontario Teachers’ Pension Plan, has been shopping for a potential bankruptcy loan of as much as $200 million. “We are considering a broad range of options to ensure the long term sustainability and success of 24 Hour Fitness and we are not going to comment publicly on our strategic plans. We look forward to continuing the reopening of our clubs,” the company said in an email. The company has been working with restructuring lawyers at Weil Gotshal & Manges LLP, some of the people familiar with the matter said. The gym chain was struggling before the coronavirus pandemic forced its 430 locations to close their doors temporarily, burning cash and losing membership, according to a Moody’s Investors Service report and an earnings report reviewed by WSJ Pro Bankruptcy.

Le Pain Quotidien Wins OK to Get Out of 59 Restaurant Leases

The U.S. arm of the Belgian bakery chain Le Pain Quotidien won a bankruptcy judge’s approval to get out of leases for 59 restaurants shut down in the fallout from the coronavirus pandemic, Bloomberg News reported. Bankruptcy Judge John Dorsey acknowledged it was uncommon for a company in chapter 11 proceedings to seek immediate freedom from the leases at issue in the case. “The relief requested is unusual, but these are unusual times,” Dorsey said. The decision to seek protection from creditors under chapter 11 of the bankruptcy code allowed Le Pain Quotidien to shed debt and carry out a $3 million sale, pending court approval, to Aurify Brands LLC. That $3 million will serve as the chain’s bankruptcy financing.

With 40 Million Americans Unemployed, Congress Mulls a ‘Return-to-Work’ Bonus

Congress and the White House are debating a “return-to-work bonus” this summer, aimed at the more than 40 million workers who have lost jobs and filed for unemployment during the deadly pandemic, as a new incentive for those who go back to work, the Washington Post reported. President Trump likes the idea, according to a senior administration official, but talks remain fluid about how big the bonus should be and how long it should last, according to eight lawmakers and staffers familiar with the discussions. Directly giving workers a government bonus for several weeks would be largely unprecedented in the U.S., although it has been done in other countries. Sen. Rob Portman (R-Ohio) has proposed that the federal government give people who stop collecting unemployment and go back to work $450 a week for several weeks. Others, including White House officials and Rep. Kevin Brady (R-Tex.), have discussed allowing workers to get up to $1,200 if they find a job, according to three people familiar with White House discussions and who spoke on the condition of anonymity to discuss internal deliberations. Republican lawmakers have repeatedly expressed concern that the increase in unemployment benefits approved by Congress in March rewards workers for staying home and could lead to increased unemployment. Lawmakers are now considering the bonus to make returning to work more attractive than remaining on unemployment. The idea is to offer an off-ramp from public assistance, without abruptly eliminating federal financial support for millions of people.

New Jersey May Have to Fire 200,000 Public Workers, Murphy Says

New Jersey Governor Phil Murphy (D) said that the state may have to cut half of its 400,000 public employees if the federal government doesn’t help make up a $10.1 billion revenue shortage through June 2021, Bloomberg News reported. “I don’t think there’s any amount of cuts or any amount of taxes that begins to fill the hole,” said Murphy, a retired Goldman Sachs Group Inc. senior director and Democrat who came to office in January 2018. Without federal help, he said, state and local governments will have to dismiss firefighters, police, emergency-medical personnel and others. “The alternative to not getting that funding is a whole lot of layoffs — we think as much as 200,000 or more,” he said. Last week his administration listed more than $5 billion in cuts and deferrals to address the expected $10.1 billion revenue shortage — the fallout from a shutdown he ordered on March 21 to slow the spread of the new coronavirus. Murphy is seeking to issue billions of dollars in short- and long-term debt, including via the U.S. Federal Reserve’s Municipal Liquidity Facility.

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