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White House, Democrats Fail to Reach Agreement on Virus Relief Bill, and Next Steps Are Uncertain

White House officials and Democratic leaders ended a three-hour negotiation yesterday without a coronavirus relief deal or even a clear path forward, with both sides remaining far apart on critical issues, the Washington Post reported. “We’re still a considerable amount apart,” said White House Chief of Staff Mark Meadows after emerging from the meeting with House Speaker Nancy Pelosi (D-Calif.), Senate Minority Leader Charles E. Schumer (D-N.Y.) and Treasury Secretary Steven Mnuchin. President Trump called into the meeting several times, but they were unable to resolve key issues. Pelosi called it a “consequential meeting” in which the differences between the two parties were on display. Mnuchin said after the meeting that if they decide Friday that further negotiations are futile, Trump would move ahead unilaterally with executive orders to address things like unemployment aid. Schumer countered that Democrats were “very disappointed” in how the meeting went and that any White House executive orders could be challenged in court. The political standoff comes as more than 30 million Americans are set to miss their second enhanced jobless benefits check in the next few days and millions of others are no longer protected by an eviction moratorium that expired last month. Democrats have sought a $3.4 trillion bill to provide more economic relief, while Republicans have sought a much narrower package. Negotiations have taken place for more than a week, and Mnuchin said that while they have made progress in certain areas, other issues — such as aid to states and cities — remain completely unsettled.

Sandy Hook Families Say Remington Snubbing Them in Ch. 11

Families of victims of the 2012 mass shooting at Sandy Hook Elementary School rebuked Remington on Wednesday for leaving them off of its chapter 11 bankruptcy creditors list, saying that damages they are seeking in litigation should be included, Law360 reported. The families told an Alabama federal bankruptcy court that the potential damages from their wrongful death suit against Remington Arms Co. LLC would "dwarf" the other claims of the company's top 40 creditors and that there is "no justification" for them not to be included on the list. "After six years of nationally significant litigation, it is simply not plausible that the debtors did not realize that the Sandy Hook families should have been included as top 40 unsecured creditors," the families said, adding that the omission is "glaring" considering the fact the families were included on the list when the company filed for bankruptcy in 2018. In light of the omission, the families urged the bankruptcy court to hold an emergency status conference, arguing that they would be irreparably harmed if they are not included on the list because they would be unable to participate in hearings and would not be considered for the unsecured creditors' committee.

Judge Approves Sale of Exide Americas Battery Business to Atlas

Exide Technologies LLC won bankruptcy court approval Thursday to sell its Americas battery business to an affiliate of Atlas Holdings for $178.6 million, the Wall Street Journal reported. The buyer is Atlas Capital Resources, a fund managed by Atlas Holdings, a manager of investments in industrial manufacturing and distribution businesses. Bankruptcy Judge Christopher Sontchi approved the sale yesterday at a hearing in the U.S. Bankruptcy Court in Wilmington, Del., where Exide is proceeding through chapter 11 for the third time. Earlier bankruptcies chopped down Exide’s debt load, but the company’s revenue failed to catch up. The current bankruptcy, which began in May, offers hope in the form of a settlement with federal and state environmental authorities over contamination left behind by Exide’s operations. Over the years, the maker and recycler of lead-acid batteries for cars and industrial use has closed sites, including a major facility in Vernon, Calif., that had been contaminated with pollution. Exide’s contaminated sites are destined for abandonment, with regulators left to clean up once the company wraps up its corporate affairs. Litigation with California regulators over the Vernon plant that began during a 2013 chapter 11 case continued as late as March. Terms of the new agreement are being presented to assorted regulators for approval, after mediations between Exide and the U.S. Environmental Protection Agency and environmental agencies in more than a half-dozen states.

Puerto Rico Earthquake and Virus Cut Revenue by $1 Billion

Earthquakes that rocked Puerto Rico in January and the coronavirus pandemic cost the island $1.1 billion in estimated revenue as Governor Wanda Vazquez closed almost all non-essential activity to help stop the spread of the virus, Bloomberg News reported. Puerto Rico’s revenue for the year that ended June 30 fell short of initial forecasts by $1.1 billion, Francisco Parés Alicea, Puerto Rico’s Treasury Secretary, said in a statement Wednesday. While the revenue collections are down from what was first expected, the $9.29 billion that Puerto Rico brought in for fiscal year 2020 is $276 million more than the revised revenue projections made on May 27. The amount of Puerto Rico’s revenue collections will help determine how much the island can repay its creditors. The U.S. territory is seeking to reduce nearly $18 billion of debt backed by the commonwealth. An oversight board that manages Puerto Rico’s bankruptcy in May cut $15 billion from the estimated amount available to pay principal and interest through 2032 after the virus stalled the island’s economy. Puerto Rico’s oversight board, which manages the commonwealth’s finances, disagrees with the Treasury Department’s calculations, saying that the government failed to include tax payments pushed into the fiscal 2021 year. Counting those funds would increase the 2020 collections to $9.6 billion, the board said in a statement on Wednesday.

Challenge to $14 Billion in Illinois Debt Revived

An appeals court in Illinois has reinstated litigation seeking to block payments on $14.3 billion in municipal debt, saying the attempt to restrain borrowing in the country’s worst-rated state isn’t frivolous or malicious, WSJ Pro Bankruptcy reported. The appellate court said that John Tillman, chief executive of the right-leaning Illinois Policy Institute, had put forth a legitimate claim in support of his theory that past bond sales by the state were impermissible. The court stressed that it wasn’t deciding the merits of Tillman’s claims but said that the litigation could continue in a lower court. The complaint accused Illinois of taking on more debt than its constitution allows and breaking a state rule prohibiting deficit financing with bond deals in 2003 and 2017. Some of those bonds raised money to prop up Illinois pension funds, while others funded back payments to stretched government vendors. Tillman, a prominent foe of public-sector unions, argues Illinois is barred from taking out long-term debt except for “specific purposes” or to refinance longer-term debt, while the state had instead borrowed to bridge deficits and to speculate on financial markets. He has asked for a court order declaring the 2003 and 2014 debt sales invalid and unenforceable and prohibiting state officials from making further payments to bondholders. A state judge dismissed the litigation last year, saying it risked “an unjustified interference with the application of public funds” and it would draw the courts into political questions that should be left to lawmakers.