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Chuck E. Cheese Parent Files for Bankruptcy | The Coronavirus Upends the Gym Industry | Burger Chain Checkers Hires Advisers
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Good day. The coronavirus pandemic turned the U.S. fitness industry upside down, forcing big chains to slim down and smaller operators to shut down permanently. WSJ’s Jon Randles surveys the damage as gyms prepare to reopen. Chuck E. Cheese parent CEC Entertainment Inc. said it filed for chapter 11 bankruptcy to continue talks with its financial backers and landlords on a balance-sheet restructuring that supports its reopening. Burger chain Checkers Drive-In Restaurants Inc., facing stiff competition even before the coronavirus ate into sales, has hired restructuring advisers Miller Buckfire and Mackinac Partners, writes WSJ’s Soma Biswas and Heather Haddon. And Cerberus Capital Management LP has slashed $100 million from its stalking horse bid for bankrupt
Fingerhut owner Bluestem Brands Inc.
Now for today's news...
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Chuck E. Cheese Parent Seeks Bankruptcy Amid Extended Restaurant Closures
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Chuck E. Cheese parent CEC Entertainment Inc. said it filed for chapter 11 bankruptcy protection as it grapples with the financial strain of prolonged closures sparked by the coronavirus pandemic. Read More.
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Fitness Industry Works to Rebound From Covid-19
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The U.S. fitness industry has been upended by Covid-19-related closures, pushing some large chains to shrink their footprints and refocus on apps for at-home workouts, while many smaller studios have closed for good. Read More.
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Burger Chain Checkers Hires Restructuring Advisers
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Checkers Drive-In Restaurants Inc. is turning to financial advisers to navigate the coronavirus pandemic’s impact on a business model that was already deteriorating, according to people familiar with the matter. Read More.
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Cerberus Slashes $100 Million From Bid for Bluestem Brands
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Cerberus Capital Management LP has slashed $100 million from its stalking horse offer for bankrupt Bluestem Brands Inc., the Fingerhut catalog owner that filed for chapter 11 in March. Read More.
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If a proposed sale to an affiliate of Harbin Pharmaceutical doesn’t go through, GNC wants to use bankruptcy to cut $300 million in debt from its balance sheet, by way of a chapter 11 plan. PHOTO: GENE J. PUSKAR/ASSOCIATED PRESS
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Bankrupt Vitamin Seller GNC to Close Up to 1,200 Stores
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GNC Holdings Inc. filed for chapter 11 bankruptcy protection Tuesday with plans to sell itself and close up to a sixth of its 7,300 stores world-wide. The vitamin-and-supplement seller blamed the filing on plummeting sales due to the coronavirus pandemic, interest coming due soon on bond debt and problems with suppliers. Absent bankruptcy financing, GNC will run out of cash to run its business by the end of this month. Read More.
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Wirecard Files for Insolvency After Revealing Accounting Hole
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Battered German fintech company Wirecard AG filed for insolvency proceedings, a week after auditors found a $2 billion hole in its balance sheet. The company, which specializes in payments processing, cited its “impending insolvency and over-indebtedness.”
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Could a Brake Tycoon Stop Germany’s Bailout Plans?
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On Thursday, Lufthansa shareholders will decide whether to green-light a €9 billion ($9.81 billion) state bailout, which would leave the German government holding a 20% stake. But alarm bells went off this week when Lufthansa’s current top shareholder, German billionaire Heinz Hermann Thiele, suggested that he may reject the deal. He has enough voting power. Read More.
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Hertz's shares rallied Wednesday on reports of car sales, even though the company doesn't own most of its used-car fleet directly. PHOTO: CINDY ORD/GETTY IMAGES
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CarMax and AutoNation Could Buy Rental Cars
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It happened again. Hertz shares rallied sharply on Wednesday, even though the car-rental company is in bankruptcy court, Barron's reports. Shares were up 50% near midday, after rising as much as 90% earlier in the day. As of noon, the stock was the 50th most popular on retail trading platform Robinhood. Read More.
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European Mall Manager Intu Warns of Administration
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Real-estate investment company Intu Properties, which owns 14 shopping centers in the U.K., has warned it could enter the equivalent of bankruptcy if talks to delay payments to its lenders aren’t successful by Friday, a Barron's article said. The company, which owns Europe’s largest covered shopping center, has appointed accountancy KPMG to plan for a potential administration. Read More.
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“Unfortunately while I love gyms, and I love people working out, gyms are a high risk area. There is no debating that.”
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— Dr. Armand Dorian, chief medical officer, USC Verdugo Hills Hospital
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Jason Industries Inc., a maker of brushes, polishing buffs and seating for heavy industry, filed for bankruptcy after turnaround efforts that began last year foundered amid the coronavirus pandemic. (Bloomberg)
A record number of U.S. companies sought loan amendments in May after rising debts and falling earnings left them at risk of breaching the terms of their borrowing. (FT)
Retailers survived the Covid-19 closures on borrowed money, but can they pay it back? (Retail Dive)
Diamond Offshore won court approval to pay up to $14.5 million in bankruptcy bonuses to top brass. (Law 360)
Virgin Australia bondholders have lodged an eleventh-hour proposal to recapitalize the stricken airline that is the subject of rival takeover bids from two U.S. private-equity groups. (FT)
Distressed-debt investor Lynn Tilton may face lawsuits related to her tenure as head of Dura Automotive now that a bankruptcy trustee is set to take on a basket of potential legal claims against the financier. (Bloomberg Law)
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