On March 27, the president signed into law Phase 3 of the federal stimulus program, called the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act. Title I of the act, titled the Keeping American Workers Paid and Employed Act (KAWPEA), directs, among other amounts, $349 billion to small businesses as part of an expansion of the U.S. Small Business Administration’s (SBA) Section 7(a) loan program under a new paycheck protection loan program (PPP) as well as $10 billion through an expansion to the SBA’s Section 7(b) economic injury disaster loan (EIDL) program.
The German parliament has adopted new legislation yesterday which is expected to become law soon. This briefing summarises the changes made, as well as a number of other legal aspects we find noteworthy in current times with regard to the real estate sector.
On 25 March 2020, the German Parliament (Bundestag) passed, in connection with the COVID-19 pandemic, significant changes in law (the “New Law”). These changes are subject to approval by the Federal Council (Bundesrat), which, however, is expected to be granted soon.
One of the key issues facing all public companies during the COVID-19 crisis is how and when to update necessary market disclosures relating to the risk impact of the pandemic on their business.
History has taught us that prolonged periods of market volatility increase the risks of litigation against both companies and their governing boards, and that the way in which they act now can have long-lasting effects.
Some companies may face severe solvency issues, which will lead to questions around the disclosure of the company’s financial position.
The COVID-19 pandemic has wreaked havoc on the global economy. The equity markets, the travel and tourism industry, and retail establishments of all stripes have been hit hard. In addition to manufacturing, shipping, and other operational and supply chain disruptions, companies will need to address their borrowing requirements. Likewise, lenders, bondholders and alternative capital providers will need to consider what their rights and obligations are under their financing documents.
The question is not if but how deeply the global coronavirus (COVID-19) pandemic will disrupt businesses and impact future operations. That answer differs based upon each company’s industry, access to cash and other capital, debt structure, ability to manage expenses, lost revenues, and operational interruption. Certain industries, such as airlines and airline service companies, hotels, restaurants, sports and entertainment, media, and retailers, among others, are suffering immediate adverse effects. Our healthcare resources are being stretched thin.
The German Federal Government is currently working on a Law for the Mitigation of the consequences of the COVID-19 pandemic in the areas of Insolvency, Corporate, Civil and Criminal Procedure Law. Ministry officials are working through the weekend with the goal to get the legislation finalized by both chambers of parliament as early as possible next week.
The coronavirus (COVID-19) outbreak has widespread and significant implications for the financing situation of companies. Mandatory emergency measures, such as closure orders, have cut off entire sectors from revenue and cash flows with severe consequences for corporate liquidity. In addition, deteriorating market conditions are putting additional pressure on companies and their ability to service their debt.
What: This evening, March 19, Senate Majority Leader Mitch McConnell introduced a bill called the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act. The proposed bill is intended to provide relief to various sectors of the U.S. economy. Of particular interest is the Coronavirus Economic Stabilization Act of 2020, set forth in Division C, Title I of the proposed bill, which provides assistance to severely distressed sectors of the U.S. economy, including (but not limited to) airline carriers.
Who Does This Impact:
In its recent decision in Rodriguez v. Federal Deposit Insurance Corp., No. 18–1269 (Sup. Ct. Feb. 25, 2020), the Supreme Court held that federal courts may not apply the federal common law “Bob Richards Rule” to determine who owns a tax refund when a parent holding company files a tax return but a subsidiary generated the losses giving rise to the refund. Instead, the court should look to applicable state law.
General Legal Background