May 05, 2020 Dunlap Seeger

New PPP FAQs: Put Rehire Offers in Writing

On Sunday, the SBA and Treasury Department posted a few more frequently asked questions/answers on the Paycheck Protection Program (PPP). Question 40 is noteworthy. It provides that a borrower’s PPP loan forgiveness amount won’t be reduced if the borrower laid off an employee, offered to rehire the same employee, but the employee declined the offer. This guidance addresses the concern that forgiveness would be reduced despite a borrower’s efforts to rehire. Under the CARES Act, forgiveness is generally reduced where a borrower More +

April 29, 2020 Dunlap Seeger

Paycheck Protection Program: New Disbursement Rule

The Small Business Administration recently released another interim final rule. This rule relates to disbursements of Paycheck Protection Program loans. It announces that borrowers may not take multiple draws to delay the start of the 8-week covered period. Under the CARES Act, the covered period is important for determining loan forgiveness. The Paycheck Protection Program FAQs had created confusion. The answer to Question 20 says that the 8‑week covered period “begins on the date the lender makes the first disbursement.” “First disbursement” implied More +

April 25, 2020 Dunlap Seeger

New Repayment Safe Harbor for Companies That Didn’t Need a PPP Loan

On Friday, the SBA issued another set of rules for the Paycheck Protection Program. No, these are not the much-needed rules and guidance on forgiveness, which we still await. These new rules cover a variety of topics, including certain requirements for promissory notes for lenders, clarification on certain eligible businesses (including a prohibition on hedge fund participation), eligibility of companies with ESOPs, and eligibility of businesses currently in bankruptcy. Perhaps the most notable piece is a new repayment safe harbor for More +

April 20, 2020 Dunlap Seeger

Do Not Forget About The Covid-19 Employee Leave Recordkeeping

Department of Labor (“DOL”) regulations require employees to provide their employer with certain documentation regarding a request for leave under the Emergency Sick Leave Act (“EPSLA”) or Emergency Family and Medical Leave Expansion Act (“EFMLEA”). Employers are required to maintain this documentation for four years. This information should include: Name of the employee; Leave dates; Qualifying reason for leave; and A verbal or written statement that the employee is unable to work because of the qualifying reason. If a leave More +

April 14, 2020 Dunlap Seeger

Commercial Property Insurance Coverage for COVID-19-Related Income Loss

Two types of commercial property insurance may cover COVID-19-related income loss for businesses: Business interruption coverage, which covers loss of income that results when damage to a business’s property prohibits the business from operating; and Contingent business interruption coverage, which covers loss of income that results when damage to a business’s supplier’s property prohibits the business from operating. To trigger either coverage, “direct physical loss or damage” to property is required. The Minnesota Court of Appeals has held “physical loss” More +

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