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Commentary: Retail Bankruptcies - Will the Shakeout Persist?

ABI Bankruptcy Brief
ABI Bankruptcy Brief
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February 22, 2018

ABI Bankruptcy Brief

Commentary: Retail Bankruptcies - Will the Shakeout Persist?

With 21 major retailers filing for bankruptcy protection, 2017 went down as the busiest year for filings since The Great Recession, according to a commentary* in the ABL Advisor. The trend toward retail bankruptcies shows every sign of continuing this year and will probably be a fact of life into 2019, according to the commentary. While some analysts see things differently - they predict either a slowdown in bankruptcies and store closures or even an outright reversal of fortunes - their arguments are not persuasive, according to the commentary. The safest bet, according to the commentary, is that today's generally positive economic trends will not be enough to save many of the decades-old chains that are nearing the end of their lifecycles.
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*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

Don't miss the "Obsolescence as a Catalyst" session at the 2018 Annual Spring Meeting as a panel of experts delve into strategies for companies, such as brick and mortar retailers, that are struggling to survive. Click here to register.

Occupancy issues are at the heart of many significant retail cases, as detailed in the forthcoming ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available for pre-order at the ABI Store.

Analysis: U.S. Colleges Are Separating Into Winners and Losers

For generations, a swelling population of college-age students, rising enrollment rates and generous student loans helped all schools to flourish, but those days are ending, according to a Wall Street Journal analysis. According to an analysis of 20 years of freshman-enrollment data at 1,040 of the 1,052 schools listed in the Wall Street Journal/Times Higher Education College Rankings, U.S. not-for-profit colleges and universities are segregating into winners and losers - with winners growing and expanding and losers seeing the first signs of a death spiral. The Journal ranking, which includes most major public and private colleges with more than 1,000 students, focused on how well a college prepares students for life after graduation. The analysis found that the closer to the bottom of the ranking a school was, the more likely its enrollment was shrinking. Enrollment at the 1,040 schools in the study grew 37 percent between 1996 and 2011. But between 2011 and 2016, enrollment at the bottom 20 percent declined 2 percent. The top 80 percent of schools grew 7 percent.
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In Puerto Rico, a Skirmish over How Much Debt the Bankrupt Island Can Handle

The $16 billion aid package that Congress approved for Puerto Rico as part of the spending deal this month came as a relief to the territory's government and its bondholders, the Washington Post reported. The price of Puerto Rican commonwealth bonds has soared since Congress passed the rescue package. Though the bankrupt territory has halted interest payments on its bonds, investors - including hedge funds - drove up the price of the general obligation bond due in 2035 by 11 percent on Feb. 14. The average price of the bond on Friday was 32.01 cents on the dollar, up 26 percent for the week. The source of investors' hopes is a new Puerto Rican fiscal plan issued Feb. 12 that sharply raised the forecasts for cash flow and long-range sustainable debt that the territory had made before Congress acted. By fiscal 2023, the government will accumulate a $2.8 billion surplus, the plan predicts. But the stronger forecasts raised fears among some lawmakers that the federal funds - earmarked for Medicaid, housing reconstruction and other repairs after Hurricane Maria - would indirectly flow to Puerto Rico's bondholders. Rep. Nydia M. Velázquez (D-N.Y.) and six other lawmakers wrote to the board created by the Puerto Rico Oversight, Management and Economic Stability Act to make sure the money from Congress is going to the right places.
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The people of Puerto Rico need your help. Thousands are still without regular power service, and many more need to rebuild their homes. Please join the ABI Endowment and the Mariano Rivera foundation for a charity benefit for Puerto Rico on April 4, 2018, at the New York Athletic Club.

ASM Session Spotlight: Best Practices in Settlements After Jevic

ABI President-Elect Ted Gavin wil moderate an expert panel at ABI's Annual Spring Meeting focused on the best practices in settlements after the Supreme Court's Jevic ruling last year. Click below to watch Gavin provide a preview of the panel and provide an opportunity for you to take part on April 20!

For more information and to register for the Annual Spring Meeting, please click here.

INSOL International Buenos Aires One-Day Seminar on March 22 Open to ABI Members

ABI members are welcome to attend the INSOL International Buenos Aires One-Day Seminar to be held on March 22 at the Marval O'Farrell Mairal in Buenos Aires. Expert panels will be discussing the latest developments in Argentina, Brazil and the wider Latin American region. The seminar will benefit from simultaneous translation in English and Spanish. Topics include:

- Coordinating cross-border insolvencies: Should Argentina adopt the UNCITRAL Model Law?
- Significant potential changes in the Argentine and Brazilian insolvency laws
- Facilitating reorganization through financing companies in insolvency proceedings
- Lessons learned in cross-border insolvencies
- What claims should be given priority in insolvency proceedings?

Click here for more information and to register.

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New on ABI's Bankruptcy Blog Exchange: Is Blockchain a Runaway Train?

Momentum is continuing unabated for blockchain projects and initial coin offerings (ICOs) as the potential for blockchain continues to be realized, according to a recent blog post.

Be sure to listen to ABI's latest podcast focused on the rise of cryptocurrency and approaches to fraudulent-transfer litigation involving bitcoins. Click here to listen.

To read more on this blog and all others on the ABI Blog Exchange, please click here.

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