The Consolidated Appropriations Act of 2021 (the CAA), which President Trump signed into law on December 27, 2020, amends several provisions of the Bankruptcy Code. While a number of the amendments are applicable only to small businesses (e.g., businesses eligible to file under the new small-business subchapter of the Bankruptcy Code and/or businesses eligible to receive PPP loans), several others have more general application, as discussed below.

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Amendments of More General Application

In Juneand Decemberof 2020, Miller Canfield reported that the Fifth and Eleventh Circuits had held that the Small Business Administration ("SBA") may exclude debtors in bankruptcy from consideration for Paycheck Protection Program ("PPP") loans, albeit for differing reasons.

Highlights

In an effort to resolve divergent court rulings, the new Consolidated Appropriations Act gives the Small Business Administration discretion to determine which small and individual debtors may obtain PPP loans in bankruptcy

The CAA allows debtors in all bankruptcy cases to automatically take up to 210 days (thereby extending the statutory period by 90 days) to choose to continue with a non-residential real property lease and provides an additional grace period on payments for small business debtors after a filing

The United States Congress revived the age-old tradition of passing a lame-duck Christmas Tree appropriations bill to fund the government and provide a second wave of much-needed COVID-19 relief legislation.[1] The nearly 5,600-page bill, which President Trump signed into law on December 27, 2020, inclu

The Federal Reserve recently announced that it’s Municipal Liquidity Facility (MLF) is taking applications from eligible issuers and will soon purchase notes at the following interest rates.

As discussed in an earlier Legal Update,¹ substantial uncertainty exists over whether companies in bankruptcy are eligible for loans under the Paycheck Protection Program, or PPP, which was established by the CARES Act to support small businesses by offering SBA-guaranteed loans on advantageous terms. Several recent bankruptcy court decisions underscore this uncertainty.

The Australian government has taken swift action to enact new legislation that significantly changes the insolvency laws relevant to all business as a result of the ongoing developments related to COVID-19.

The Coronavirus Economic Response Package Omnibus Act 2020 (Response Act) became effective on March 25, 2020, and is an effort to provide temporary relief to companies experiencing financial distress as a result of the ongoing and rapidly changing economic slowdown caused by COVID-19.

The COVID-19 Response Act

On May 1, 2020, the United States Bankruptcy Court for the District of New Mexico ruled in favor of the Roman Catholic Church of the Archdiocese of Santa Fe (Archdiocese) granting a temporary injunction against the Small Business Administration (SBA) that had rejected the Archdiocese’s application for a Paycheck Protection Program (PPP) Loan under the CARES Act.

GOVERNANCE & SECURITIES LAW FOCUS

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MAY 2020/LATIN AMERICA

Below is a summary of the main developments in US, EU, and UK corporate governance and securities law since our last update in February 2020.

Financial regulatory developments are available here.

IN THIS ISSUE

The Small Business Administration (SBA) violated federal law by imposing conditions for loans under the Paycheck Protection Program (PPP) that were not enacted in the Coronavirus Aid, Relief, and Economic Security Act, H.R. 748, P.L. 115-136 (CARES Act), Judge David Thuma has held.