Congress has expanded the application of the Small Business Reorganization Act of 2019 (SBRA) to make available the streamlined and, therefore, less expensive form of business reorganization to more businesses. The SBRA went into effect on February 19, 2020 and provides for some modifications to a typical Chapter 11 reorganization for very small businesses, which streamlines the process in many ways, including: Creditor’s committees are eliminated. A private trustee is appointed in the case to act as a liaison between the business and its creditors to attempt to arrive upon a consensual plan. No separate disclosure statement is required and …
Ohio Governor Issues Guidance for Commercial Lenders and Landlords
Ohio Governor Mike Dewine issued an Executive Order (Order 2020-08D) on April 1, 2020 requesting that landlords and lenders to small businesses provide rent and payment relief to their tenants/customers. Governor DeWine’s order is here. Governor DeWine requests in his order that landlords with small business commercial tenants suspend rent payments and cease evictions, both for at least ninety consecutive days. Similarly, mortgage lenders are asked to provide at least ninety consecutive days of forbearance. Specifically, Governor DeWine is asking lenders to forgo monetary and non-monetary remedies (filing suit, initiating foreclosures, impounding funds, terminating credit, sweeping cash, or requiring waivers …
SBA Affiliation Rules as They Pertain to the CARES Act
On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. Our separate post outlines the Paycheck Protection Program (“PPP”), which is administered by the U.S. Small Business Administration (SBA), and is a distinct component of the Act. Inherent to the PPP (and other SBA loans modified by the Act), is the question of “affiliation” as it pertains to businesses, their owners, and their parent and subsidiary entities and affiliations. Importantly, the SBA’s size and affiliation rules are broader than most common understandings of the affiliation concept in other aspects of the law and will …
Stay at Home Order Enforcement Underway in Montgomery County, Ohio
The Dayton Daily News reported this morning (April 1, 2020) that 270 Montgomery County sites are being investigated for failing to comply with Ohio’s Stay at Home Order. The Dayton & Montgomery County Department of Public Health is sending letters to businesses covered by such complaints and are requesting that they provide information proving that they comply with the Stay at Home Order. Health inspectors also started visiting sites on Monday. Specifically, responding businesses are going to be asked to submit: justification that the business meets the definition of essential businesses and operations; the measures the business has implemented to …
New IRS Guidance Requires Employees to Provide Information to Request Paid Leave
New guidance from the IRS, issued the evening of March 31, 2020, answers some of the questions left open by recent DOL publications on the issue of Emergency Paid Sick Leave (EPSL) and Expanded FMLA leave under the Families First Coronavirus Response Act (FFCRA). Perhaps most importantly, the IRS guidance identifies specific information that employers can require from employees seeking paid leave under the new statute. Employers may require a written request for any leave sought under the FFCRA including, at a minimum: The employee’s name; The date or dates for which leave is requested; A statement identifying the COVID-19 …
Coolidge Wall Outlines Key Features of the Paycheck Protection Program For Your Business
The Paycheck Protection Program provides approximately $350 billion for a temporary supplement to the SBA’s current loan program through which SBA-approved banks are authorized to make loans to qualifying eligible entities. The PPP has three key components: Expanding the businesses that are eligible for loans; Modifying the loan terms, including eliminating guaranty and collateral requirements of the borrower; and Allowing all or a portion of the loan to be forgiven if the borrower maintains its payroll during the eight-week period following the funding and uses the loan proceeds as permitted. SBA-approved banks are moving expeditiously to create simple PPP loan …
The CARES Act and Its Impact on Retirement Plans
This is the third in a series of articles discussing the impact that the COVID-19 (coronavirus) pandemic and the governmental responses to it have had on employee benefits. The first two articles dealt with employer group health plans, continuation coverage, HIPAA privacy, and other welfare benefit plans. This article summarizes the provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) enacted March 27th that affect employer-sponsored retirement plans and individual retirement accounts (IRAs). Coronavirus-Related Distributions The CARES Act creates a new type of permissible distribution under 401(k), 403(b), and governmental 457(b) plans plus IRAs. The Act states …
New DOL Guidance Clarifies Families First Coronavirus Response Act
A new compliance assistance guidance from the DOL (“Guidance”) has been posted concerning the paid leave provisions under the Families First Coronavirus Response Act (“FFCRA”), which includes Emergency Family and Medical Leave Expansion leave (“Expanded FMLA”) and Emergency Paid Sick Leave (“EPSL”) provisions, all of which become effective April 1, 2020. As before, the new Guidance is in the form of “FAQ” statements — 59 of them, to be exact. Much of the new Guidance simply reiterates information from the previous statements issued in the last two weeks. However, some of the information is new or clarifies existing DOL positions. …
Essential Resources for Managing Your Business in Uncertain Times
Your business is or will be under unprecedented pressure. We have created the Resource Center to provide you with critical tools to manage through this uncertainty, including a Toolkit, Cash Flow Projection template, and essential information for accessing government programs such as the Economic Injury Disaster Loans and the new Paycheck Protection Program included in the CARES Act. TOOLKIT – A 4-Step Process to Address COVID-19 Uncertainties.pdf Changes to PPP in SBA’s Interim Final Rule.docx SBA Issues Last Minute Interim Rule on PPP Critical Leadership Traits during Crisis SBA Affiliation Rules as They Pertain to The CARES Act Key Features …
13-Week Cash Flow Projection Template for Your Business
UPDATED: This template has been updated to include a tool for projecting and tracking use of PPP loan proceeds and optimizing the amount of loan forgiveness here. A rolling 13-week Cash Flow Projection is an essential weapon in your battle against uncertainty. This template may be used to create that tool for your business. Instructions for creating and using the template are included. If you need additional information, assistance, or a review of your projection, contact Herman Chandiramani. (Please note this tool will automatically download onto your computer into your Download files.) You may also find the below articles helpful …