KMK Law Corporate & Securities Blog

On May 13, 2020, the Department of the Treasury (“Treasury”) posted a new update to the Frequently Asked Questions (“FAQs”) it has been periodically updating since passage of the CARES Act.  The new FAQ #46 gives borrowers who, together with their affiliates, have received PPP loans in amounts less than $2 million comfort that the Small Business Administration will not challenge the borrower’s certification that the PPP loan was “necessary” due to economic uncertainty.

On May 8, 2020, Hamilton County, Ohio announced that it would be launching a small business loan program to facilitate the distribution of financial aid to small businesses. The funds to be used in the program were received by Hamilton County under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Hamilton County received a total of $142 million from the CARES Act and has currently set aside $5 million of these funds for use in the small business loan program. Hamilton County officials have indicated that the aggregate amount of funds used for these small business loans may be increased.

As more and more businesses begin to open their doors to customers, clients are asking what potential liability risk they incur by allowing customers onto their business premises.  Even for businesses that take all the recommended precautions to reduce the risk of exposing customers to the COVID-19 virus, there is no guarantee that the virus will not spread to customers of the business. There is also no guarantee that customers will not allege that they contracted the virus from visiting a particular business resulting in legal costs to that business. Because, in certain situations, contracting COVID-19 can result in missing a substantial amount of work, extended hospital stays and treatments, and even death, the legal costs could become significant.

On April 30, 2020, the Internal Revenue Service (“IRS”) issued Notice 2020-32 which explains expenses paid with Paycheck Protection Program (“PPP”) loan proceeds are nondeductible for tax purposes to the extent the PPP loan is later forgiven.

Earlier today, the Small Business Administration (“SBA”) published a new Interim Final Rule (“IFR”) which limits the amount of Paycheck Protection Program (“PPP”) loans a “single corporate group” may receive to $20 million in total. This limitation appears to apply only to loan disbursements occurring after April 30, 2020, but borrowers should be aware of the limitation and its interplay with other recent SBA guidance.

SEC Provides Guidance on Earnings Disclosures & COVID-19 Impacts

On April 8, 2020, Jay Clayton, Chairman of the SEC, and William Hinman, Director of the SEC’s Division of Corporation Finance, issued a statement discussing the importance of disclosures related to the COVID-19 pandemic in anticipation of upcoming earnings releases and investor calls. In order to encourage more robust disclosures and shareholder engagement on this topic, the statement outlines, among others, several areas of observation and concern for companies:

• Disclosures should reflect the general ...

On March 25, 2020, the Securities and Exchange Commission (the “SEC”) extended its March 4, 2020 Order (the “Extended Order”) granting exemptions to reporting and proxy delivery requirements for public companies. The Extended Order (described in our advisory here) provides reporting relief for public companies with reports due on or before July 1, 2020.

On March 25, 2020, the SEC extended its March 4 Order granting exemptions to reporting and proxy delivery requirements for public companies. The SEC’s Division of Corporation Finance also issued Disclosure Guidance Topic No. 9 – Coronavirus (COVID-19).

Today, the Governor of Indiana issued a Stay at Home Order applicable to all Indiana residents and all business activities in the State of Indiana. The definition of Essential Business and Operations are substantially similar to those provided for in the Illinois and Ohio orders. The other restrictions on Indiana residents and businesses are also substantially similar. The Executive Order becomes effective at 11:59 p.m. on March 24, 2020 and remains in full force and effectual until 11:59 PM on April 6, 2020. A copy of the Order can be found here.

As you are probably aware, the State of Ohio issued a "Stay at Home Order" requiring, with certain exceptions, all individuals currently living within the State of Ohio to stay at home or at their place of residence and that all non-essential businesses and operations must cease.