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Unforeseen Consequences for Bankruptcy Practice In CARES Act
In the wake of the global COVID-19 pandemic, Congress hurriedly passed a host of economic relief bills to provide "American workers, families, and small businesses fast and direct economic assistance and to preserve jobs." The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in March 2020 to provide over $2 trillion in economic relief. The CARES Act included the Paycheck Protection Program (PPP) and certain follow-on acts that injected over $650 billion for small business and their employees. Additionally, small businesses were granted the right to apply for Economic Injury Disaster Loans (EIDL) offered by the U.S. Small Business Administration (SBA).
While we assume lawmakers had the best intentions, the hasty implementation of such an unprecedented stimulus package has resulted in unforeseen consequences and marked inconsistencies in its application. This article highlights several of these outcomes and discrepancies, including how accepting crisis funding could lead to a company becoming more distressed, how bankruptcy courts are inconsistently ruling on the ability for Chapter 11 debtors to receive PPP loans and how changes to the Bankruptcy Code altered the rights of equity holders and debtholders.
Loan Forgiveness Out of Reach
The PPP was intended to expeditiously deliver loans to businesses affected by the pandemic, with funds becoming fully or partially forgiven if a substantial majority of the loan proceeds were utilized to fund payroll costs. On June 5, 2020, Congress passed the Paycheck Protection Flexibility Act (the Flexibility Act) in order to ease conditions for small businesses and other PPP borrowers to qualify for full loan forgiveness by reducing the percentage required to fund payroll. Initially, businesses were required to utilize 75% of the loan in eight weeks for payroll costs at pre-pandemic staffing levels. The Flexibility Act reduced the requirement to 60% and extended the time to spend the funds to 24 weeks.
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Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Anti-Assignment Override Provisions
UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?