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COVID-19 (Coronavirus)

  • COVID-19: Tennessee Becomes Latest State to Issue Stay-Home Order

    In response to the outbreak of COVID-19, Tennessee Governor Bill Lee issued a stay-home order on Thursday evening. The order amends earlier executive orders that had enacted less strict restrictions on travel in Tennessee.

  • Zone of Uncertainty: Director Considerations in Responding to COVID-19

    Boards of directors face the challenging task of managing the impact of the COVID-19 pandemic on the business, be it from reduced demand, supply chain or operational interruptions, employee issues, or liquidity constraints.

  • Texas Environmental Compliance During the COVID-19 Pandemic

    The swift onslaught of the COVID-19 virus has presented serious challenges to the regulated community’s ability to maintain standard compliance protocols. Environmental agencies, which are also struggling with workforce impacts of their own, are responding with updated compliance and enforcement policies meant to provide some measure of relief, without relaxing substantive obligations.

  • Governor DeSantis issues “Safer at Home” Order until April 30, 2020

    On April 1, 2020, Governor Ron DeSantis mandated the closure of all nonessential businesses by Executive Order 20-91, effective April 3, 2020, at 12:01 am and expiring on April 30, 2020, unless extended by subsequent order. The order also requires anyone in Florida to limit their movement and personal interactions outside of the home to “essential services” and “essential activities.” The Order also mandates that senior citizens and Floridians with significant underlying medical conditions (chronic lung disease, moderate to severe asthma, serious heart conditions, immunocompromised status, cancer, diabetes, severe obesity, renal failure, and liver disease) “shall stay at home and take all measures to limit the risk of exposure to COVID-19.”

  • Health Care Providers Should Prepare for $100 Billion Reimbursement

    The Coronavirus Aid, Relief, and Economic Security (CARES) Act appropriates an additional $100 billion to the “Public Health and Social Services Emergency Fund” to reimburse “eligible health care providers” for COVID-19 related health care expenses or lost revenues. The Act gives the Secretary of Health and Human Services (HHS) broad discretion in distributing these funds as efficiently as possible. The Secretary has yet to publish guidance as to how funds will be administered, so we will be following developments closely as they occur. Below are the key concepts for those interested in pursuing these funds.

  • COVID-19 Impacts on REITs and Mitigation Strategies

    Investing Debt Proceeds
    With the sudden shutdown of REIT business tenants from COVID-19 and the potential impact on REIT landlords, REITs have sought large infusions of cash for liquidity. A REIT borrowing a large amount of cash may want to invest that cash in short-term income-producing investments. However, the REIT must be conscious of the quarterly REIT asset tests if it intends to place borrowed cash in anything other than bank demand deposit accounts. The 75% asset test under federal income tax law (the Code) generally requires that, as of the close of each quarter of the taxable year, at least 75% of the value of the REIT’s assets must consist of real estate assets, cash, cash items (including receivables), and U.S. government issued or guaranteed securities (collectively, “good” assets). Other financial instruments are generally treated as “securities” and would not be treated as “good” assets for this 75% asset test, and a REIT’s holdings in such assets are limited under several other asset tests.

  • COVID-19 Relief: What Funds, Corporate Investors and Their Portfolio Companies Should Know About Eligibility for the Payroll Protection Program Under the CARES Act

    The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), passed on March 27, 2020, sets aside $349 billion for Paycheck Protection Loans, which are available through banks, credit unions and other lenders (and guaranteed by the Government) and allows for forgiveness of certain amounts. The authority to make and approve loans under the programs is to be delegated by the SBA to participating lenders. (We summarized the Act’s small business loan provisions here.) Loans under the Paycheck Protection Program are available through June 30, 2020, and expanded Economic Injury Disaster Loans are available through December 31, 2020.

  • California Eases Strict Statutory Compliance in Face of COVID-19

    Governor Newsom issued an Executive Order this weeks that augments the existing California stay-at-home order, EO N-33-20, to provide administrative relief to governmental agencies as well as the business sector whose compliance with certain laws and regulations is likely to be adversely impacted by COVID-19.

  • Closing the Capitol: Mayor Bowser Issues Stay-at-Home Order

    Following a growing list of states and municipalities, on March 30, 2020, Washington, DC, Mayor Muriel Bowser issued an order to all individuals living in Washington, DC, to stay at home except to perform “essential activities.” Order 2020-54 is effective from 12:01 am on April 1, 2020, until April 24, 2020, unless extended, rescinded, superseded or amended by a subsequent order.

  • Virginia Ordered to Stay at Home Until June 10th

    In response to the rise in COVID-19 cases both nationwide and in the Washington, DC, region, Virginia Governor Ralph Northam issued a statewide order for residents to stay at home except in very limited circumstances. Executive Order No. 55 is effective immediately and remains in place until June 10, 2020, unless amended or rescinded by another executive order.

  • COVID-19: Due Diligence Considerations for Underwriters in Securities Offerings

    In the wake of COVID-19, underwriters should be vigilant when conducting due diligence on an issuer intending to engage in a securities offering. The issuer could be facing work-stoppages, supply-chain disruptions, reduced demand for products and services, securities portfolio devaluations, impairments, or a host of other concerning developments, any of which could be material to the issuer’s business, financial condition or results of operations. Underwriters should seek to understand all material impacts of COVID-19 on the issuer to ensure that such matters have been properly disclosed to investors prior to any underwritten offering. These matters can be explored, among other ways, in due diligence sessions with the issuer’s management.

  • Mitigation of Investment Adviser Business Interruption and Regulatory Non-Compliance Risks Related to COVID-19

    We recommend the following specific measures to mitigate risks of business interruption and regulatory noncompliance resulting from the COVID-19 pandemic.

  • So the Government Shut Down Your Construction Project—What Next?

    Last Friday, New York issued updated guidance that halted all construction in the state, except for “essential construction” which consists of roads, bridges, transit facilities, utilities, hospitals or health care facilities, affordable housing, and homeless shelters. As a result, most commercial construction and condominium projects are now on hold, with the exception of work that must be completed for safety purposes and emergency work. The New York guidance is a drastic departure from the state’s previous guidance, which generally exempted construction as an essential service. The Empire State Development’s website provides further detail as to what constitutes essential health care operations and infrastructure.

  • New $500 Billion Treasury Loan Programs Under the CARES Act Provide COVID-19 Relief for Private Sector Business

    The CARES Act (H.R. 748) was signed into law on March 27, 2020. In a Client Alert issued that day, we summarized the Act’s provisions in Title I relating to its appropriation of $350 billion for small business loans.

  • COVID-19 Relief: Understanding SBA Loan Opportunities Under the CARES Act

    On March 11, 2020, President Trump announced in a national address that the SBA would be making $50 billion in low-interest loans available to small businesses impacted by the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) greatly exceeds the President’s initial pledge by appropriating $350 billion for “Paycheck Protection Loans” for small businesses—including up to $10 million per company for companies with fewer than 500 employees. The Act also makes $10 billion available to the SBA’s existing Economic Injury Disaster Loans for companies impacted by COVID-19, and modifies the rules for those loans is several ways. At the time of this publication, the CARES Act (H.R. 748) has been passed by both chambers of Congress and is expected to be signed by President Trump on March 27, 2020. We summarize below the Act’s major provisions related to these two types of SBA loan opportunities.

  • New Coronavirus Legislation Fixes Real Estate Glitch from 2017 Tax Act

    On March 25, the Senate passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a third legislative attempt to address the economic effects of the COVID-19 pandemic. The House is expected to take up the legislation on Friday, March 27. Included in the CARES Act is a retroactive amendment to the bonus depreciation rules, which should now finally allow taxpayers to claim 100% bonus depreciation for “qualified improvement property.”

  • New York Regulation Defines Required Mortgage Forbearance and Bank Fee Waivers for COVID-19 Financial Hardship

    With the spread of the novel coronavirus (COVID-19) throughout the country, as described in earlier client communications, federal and state officials at every level are issuing guidance and directives advising financial institutions on how to handle situations in which the pandemic prevents individuals from repaying loans. New York Governor Andrew Cuomo issued Executive Order No. 202.9 (EO 202.9), dated March 21, 2020, containing a broad requirement for forbearance and relief from banking fees for those experiencing financial hardship as a result of COVID-19. EO 202.9 is operative until April 20, 2020. EO 202.9 has been implemented in an Emergency Regulation issued by NYSDFS on March 24, 2020, Emergency Relief for New Yorkers Who Can Demonstrate Financial Hardship as a Result of COVID-19, 119 NYCRR 3 (the DFS Regulation). The DFS Regulation applies to “Regulated Institutions,” defined as “any New York regulated banking organization under New York Banking Law and any New York regulated mortgage servicer entity subject to the authority of the Department.”

  • New Jersey State and Local COVID-19 Orders

    One of New Jersey’s most well-known sons, Frank Sinatra, famously proclaimed, “I did it my way.” In response to the grave threat COVID-19 presents to life and health, Governor Phil Murphy has taken steps to insure that, for the time being, localities in New Jersey cannot follow in Ol’ Blue-Eyes’ footsteps.

  • Stay at Home Massachusetts: Nonessential Services Closed

    Following his earlier declaration of a state of emergency, on March 23, 2020, Massachusetts Governor Charlie Baker issued an emergency order instructing all businesses and organizations in the Commonwealth that do not provide “COVID-19 Essential Services” to close their physical locations. The emergency closure went into effect at 12:00pm on March 24, 2020 and remains in place until 12:00pm on April 7, 2020. To slow the alarming spread of the novel Coronavirus (COVID-19), Order No. 13 further restricts movement within the community by prohibiting indoor gatherings of more than ten people. In tandem, Governor Baker also directed the Department of Public Health (DPH) to issue a “stay-at-home” advisory.

  • Maryland Extends COVID-19 Closures to Nonessential Businesses

    On March 23, 2020, Maryland Governor Larry Hogan mandated the closure of all nonessential businesses by executive order effective as of March 23, 2020 at 5 p.m. A person who knowingly or willfully violates the order may be subject to imprisonment of up to one year or a fine of up to $5,000, or both. As with the governor’s prior executive orders prohibiting large gatherings and directing business closures in response to COVID-19, the March 23 order suspends any statute, rule, or regulation of a state agency or political subdivision that is inconsistent with the order.

  • U.S. Merger Review in the Time of Coronavirus

    Both U.S. antitrust enforcement agencies—the Federal Trade Commission (FTC) and the Department of Justice Antitrust Division (DOJ)—are changing their approach to civil enforcement and merger review during the coronavirus pandemic.

  • New York Bankers Must Consider Forbearance, Other Consumer Protection in Response to COVID-19

    With the spread of the novel coronavirus (COVID-19) throughout the country, New York Governor Andrew Cuomo issued Executive Order No. 202.9 (“EO 202.9”), dated March 21, 2020, containing a broad requirement for forbearance and relief from banking fees for those experiencing financial hardship as a result of COVID-19. EO 202.9 is operative until April 20, 2020.

  • COVID-19 Pandemic Will Soon be Impacting Compliance with and Enforcement of Environmental Laws

    Remote work and other impacts to company workforces from the novel coronavirus pandemic are likely to result in practical limitations on usual environmental, health and safety compliance programs and activities across a wide variety of industries. We are already seeing see some regulatory agencies issuing new guidance and orders with implications for compliance and enforcement, and it is worth noting that regulatory agencies will also likely be impacted by their own workforce capacity issues in this environment.

  • New York State Enacts Mandatory Sick Leave Law with Job Protection During COVID-19 Quarantine

    On March 18, 2020, Governor Andrew Cuomo signed Senate Bill S8091 into law to provide sick leave and job protection for New York workers during the COVID-19 crisis. Under the new law, effective immediately, companies cannot fire or penalize employees who are unable to work while subject to “a mandatory or precautionary order of quarantine or isolation due to COVID-19.” The order must be issued by the state of New York, the department of health, local board of health, or any governmental entity with authority to issue such orders. The job protection lasts for the duration of the period that employees are self-isolating under a mandatory or precautionary order. Employees who are able to work remotely while under the “stay at home” orders and who are asymptomatic or not yet diagnosed are not covered by the new law.

  • California Executive Power and Industrial Facilities in the Wake of COVID-19

    The COVID-19 pandemic has rapidly become one of the world’s most serious public health challenges, and has caused unprecedented disruption to industries in the United States and across the globe. Industries doing business in California have felt the impacts more acutely than most, as the state has become one of the nation’s “hotspots” for new COVID-19 cases. These impacts have sparked numerous efforts by state and local authorities in California to attempt to address the virus, encompassing everything from suspension of all public gatherings, to mass cancellation of sports and entertainment events, to citywide quarantines.

  • COVID-19: IRS and States Extend Tax Deadlines

    On March 20, the IRS issued Notice 2020-18 announcing that federal income tax payments and payments due on April 15 may be deferred until July 15. Notice 2020-18 supersedes Notice 2020-17, issued just two days earlier. States are quickly aligning with the IRS’s extension of time, with California already adopting similar relief. The relief is intended to ease an imminent payment burden and create liquidity, but high income individual taxpayers may disproportionately benefit from the deferral because they are most likely to pay final 2019 and 2020 estimated tax payments on April 15, whereas a large proportion of individual taxpayers actually receive refunds after filing their returns.

  • President Trump Invoked the Defense Production Act: What Are the Implications?

    Earlier today, President Trump invoked the Defense Production Act, codified at 50 U.S.C. §§ 4501 et seq., in response to the COVID-19 pandemic. The Act’s implementing regulations, found at 15 C.F.R. §§ 700.1 et. seq., promulgate the Defense Priorities and Allocations System (DPAS). Congress enacted the Act in 1950 to address the short supply of essential goods during the Korean War. The Act allows the federal government to require domestic industries to provide essential goods and services needed for the national defense.

  • COVID-19: Analysis of H.R. 6201, the Families First Coronavirus Response Act

    On March 18, 2020, the U.S. Senate passed H.R. 6201, the Families First Coronavirus Response Act, following U.S. House of Representatives action on the legislation several days earlier. President Trump is expected to sign the bill into law immediately.

  • Scenarios Government Contractors May Face During the COVID-19 National Emergency

    On March 13, 2020, President Trump declared that the outbreak of COVID-19 constituted a national emergency. Government contractors will face a number of scenarios—some familiar and some not—as a result of the outbreak. In this client alert, we raise four possible factual scenarios contractors are likely to encounter. We then analyze how contractors facing these scenarios can (1) best protect themselves from liability for schedule delays they may experience, and (2) best position themselves to recover for their attendant cost growth.

  • COVID-19: Congress and Federal Regulators Tell Financial Institutions to Prepare for Coronavirus Changes

    With the spread of the novel coronavirus (COVID-19) throughout the country, regulators and Members of Congress have begun advising financial institutions on how to handle situations in which the pandemic prevents individuals from repaying loans.

  • M&A in the Time of COVID-19

    As novel coronavirus (COVID-19)—characterized by the World Health Organization on March 11, 2020 as a pandemic—continues to spread across the globe, companies and transaction participants are grappling with increased risk and uncertainty posed by the virus. This note identifies a few ways in which the developing outbreak may present challenges, both fundamental and practical, to the deal-making process and timelines. It also offers an analysis of how the virus may impact negotiations around that mainstay of M&A lawyering, the “material adverse change” (MAC) clause.

  • COVID-19 Emergency Funding and Tax Relief: Assessing Federal Opportunities

    One thing is certain about how Washington policymakers will respond to the coronavirus (COVID-19) outbreak: there will be spending, both in the form of tax relief and through direct federal funding.

  • Mitigating Employment Law Risks as COVID-19 (Coronavirus) Spreads

    As coronavirus disease 2019 (abbreviated “COVID-19”) spreads worldwide, businesses in the U.S. face practical and legal employment challenges as they take measures to further the immediate goal of preventing the spread of physical infection to and within their workforces.

  • As Coronavirus Spreads, Businesses Must Be Prepared for a Crisis All Their Own

    As of today, there are reportedly more than 90,000 confirmed cases of COVID-19, with the virus having reached every continent except Antarctica. As corporate America wrestles with the unfolding implications of coronavirus, here are three essential crisis management tips to ensure business continuity: