Below are five points of focus for Maiello Brungo & Maiello this week.
Last Updated: May 4, 2020
The PPP Loan Forgiveness Battle. Using loan proceeds to bring employees back or maintain staffing level may not be enough. The rules continue to change daily. The SBA will not only audit loans in excess of $2 million but has indicated it will review “other loans as appropriate.” Prepare now by creating a “Business Snapshot.” What challenges were you facing as a business: cashflow, new business prospects, financial conditions, and governmental restrictions. Don’t wait to put the pieces in place to support your PPP Forgiveness application. MBM can help build your Business Snapshot.
Laid off Employee Refusal to Return PPP Impact. The reality is some employees will refuse to return to work when you are able to reopen. To avoid a negative impact on its PPP loan forgiveness, an employer needs to handle those employee situations correctly. An employer must properly document the return to work offers thereby avoiding the FTE forgiveness reduction calculation impact on the PPP loan balance.
Bankruptcy Impact. A tenant who files for bankruptcy and assumes a lease generally is required to become current on the rent owed prior to the bankruptcy. A tenant’s assumption of a lease may serve as a landlord’s defense to the avoidance of lease payments made on account of prior debt, including deferred rent. MBM can counsel you in understanding your rights as a landlord in the event of a tenant bankruptcy.
Back on the Construction Site. The first day back on the construction site brought to light the challenges contractors will face. Getting workers back on the job, obtaining materials and equipment per the new guidelines will cause the work to take longer and increase costs. Contracts may allow for time extensions and the recovery of additional costs. Review your contract now and properly document your challenges to support potential claims. MBM can help with your contract review and potential claims.
Commercial Leases. Landlord and tenants should consider how future leases can provide workplace density options to reflect changing space requirements. Tenants have established effective remote work systems and rotating employee schedules to comply with the COVID social distancing regulations. Landlords need to meet these new business models. Extended building hours, micro co-share options etc., may provide solutions. Consider your options when negotiating a commercial lease. Work with MBM to re-make your commercial lease forms for the post-Covid marketplace.
The attorneys of Maiello, Brungo & Maiello are available to answer additional questions and assist you with navigating the loan application process. Please contact either Lawrence Maiello or John H. Prorok of Maiello, Brungo & Maiello, LLP’s Business Law Team.