Financial Daily Dose 5.26.2020 | Top Story: Covid-19 Drives Already-Troubled Hertz to Bankruptcy

Robins Kaplan LLP

Robins Kaplan LLP

Unable to reach a last-minute deal with investors, rental car mainstay Hertz filed for bankruptcy late Friday night, doing so “without a clear plan with creditors in place—a rare move for a company of its size.” Though, like the other big-name bankruptcies in recent weeks, the pandemic pushed the company over the edge, Hertz has been in pretty miserable shape for years, beset by “a series of strategic missteps and other blunders that kept Hertz behind competitors and buried in debt” – WSJ and MarketWatch and Law360 and Bloomberg

The German government will take a 20% of carrier Lufthansa as part of a newly announced $10 billion bailout aimed at helping the airline “survive an ‘existential emergency’ caused by the pandemic and a virtual shutdown of passenger air traffic” – NYTimes and WSJ and Bloomberg

“Essential” label in hand, meat packing plants are reopening around the country to keep Americans in burgers and pork chops. But even as the plants restart operations (after many shutdown due to massive outbreaks among their employees), neither the companies in charge nor state or local officials are providing any data about the number of illnesses at each location – NYTimes

The Journal’s certainly not declaring the worst of the virus in the States over, but it suggests that may be the case for the U.S. economy, as increased truck loads, air and hotel bookings, and mortgage applications suggesting that business is “ever so slowly, creeping back to life” – WSJ

About those mortgage applications . . . . With lenders tightening income, credit-score, and down-payment conditions, what should theoretically be a “banner time for households in search of a new mortgage” isn’t shaping up to be as easy as expected for many – WSJ

More coronavirus stimulus details—this time, news that twenty of the largest hospital chains in the U.S. took it $5 billion in government funds, despite them collectively “sitting on more than $108 billion in cash, according to regulatory filings and the bond-rating firms S&P Global and Fitch” – NYTimes

Teva Pharmaceuticals Industries, the Israel-based mega-producer of generic drugs, has pulled out of settlement talks with the Department of Justice over its role in an alleged “conspiracy by pharmaceutical companies to increase the prices of popular drugs.” Teva appears to be “betting that in the middle of a deadly pandemic,” the White House “won’t dare to come down hard on the largest supplier of generic drugs in the United States” – NYTimes

In other big pharma news, France’s Sanofi is “selling a stake in Regeneron Pharmaceuticals Inc. valued at about $13 billion, giving the French drug giant more firepower to invest in fast-growing fields such as cancer” – Bloomberg

As Bayer continues to deal with one of the most disastrous acquisitions in recent memory, the company is reportedly nearing a deal that would potentially resolve more than half of “an estimated 125,000 U.S. cancer lawsuits over use of its Roundup weedkiller” it “inherited when it acquired Monsanto in 2018” – Bloomberg

Some thoughts from the European Banking Authority on the state of Eurozone financial institutions, including how they’re likely to fare as the economic fallout from the pandemic stretches on – WSJ

Yeah, so you’re not the only ones stuck on your couches.  The Times’ movie crew is as well, which likely explains the prevalence of streaming movies in their picks for the top movies of the first half of the year – NYTimes

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Robins Kaplan LLP

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