On May 27, 2020, the Federal Reserve Bank of Boston (FRBB) released the legal forms and agreements for eligible borrowers and eligible lenders to participate in the Main Street Lending Program (MSLP). The FRBB also published updated Frequently Asked Questions (FAQs), which include numerous new questions and answers regarding eligibility, loan terms and conditions, borrower certifications and covenants, regulatory requirements and reporting, and other issues.

On April 30, 2020, the Federal Reserve Board (Federal Reserve) had issued the terms and conditions for three MSLP facilities: the Main Street New Loan Facility (MSNLF), the Main Street Priority Loan Facility (MSPLF), and the Main Street Expanded Loan Facility (MSELF). Copies of all documents can be found on the FRBB’s Main Street Lending Program Forms and Agreements webpage.

In the May 27 release, the term sheets for the three MSLP facilities were not amended from the forms released on April 30, and the definitions of “Eligible Borrower” and “Eligible Lender” remain unchanged. An overview and summary of the previously issued term sheets, including eligible borrower and eligible lender requirements, can be found here. A list of covenants and commitments required to be made by eligible borrowers and lenders — including compliance with the CARES Act’s compensation, stock repurchase, and capital distribution restrictions — is also detailed.

Although the MSLP has not yet been launched, the documents, checklists, and revised guidance issued on May 27 appear to be final, subject to future Federal Reserve interpretation and refinement. Accordingly, eligible borrowers and eligible lenders should review the available guidance and documentation, and address potential issues surrounding the facilities’ terms and conditions with their counsel now. We expect that the Federal Reserve and FRBB will announce the program start date in the coming days.

Continue Reading Main Street Lending Program — Federal Reserve Bank of Boston Issues Required Forms and Revised Guidance

On Friday, May 22, 2020, the Small Business Administration (SBA) released two new Interim Final Rules (collectively, the Rules) governing Paycheck Protection Program (PPP) loans: (1) the Loan Forgiveness Requirements (Forgiveness Rule) and (2) the SBA Loan Review Procedures and Related Borrower and Lender Responsibilities (Lender Responsibility Rule). These Rules provide lenders of PPP loans (Lenders) some of the first clear answers on their responsibilities with respect to processing PPP Loan Forgiveness Applications, and it is fair to say that those responsibilities likely exceeded what many Lenders expected, much less desired. This memorandum summarizes the requirements and procedures the new Rules place on Lenders for reviewing PPP loans and Loan Forgiveness Applications, and suggests some unanswered questions raised by them.

Continue Reading New Interim Final Rule on SBA Loan Review Procedures and Related Lender Responsibilities Regarding the Paycheck Protection Program

On May 14, 2020, the Securities and Exchange Commission (SEC) approved the request by the Nasdaq Stock Market (NASDAQ) to delay until September 1, 2020, the implementation of a recently adopted rule that will accelerate the delisting process for listed companies (i) with securities in a minimum bid price compliance period (as described below) with bid prices at or below $0.10 or (ii) that have fallen below the minimum bid price after completing one or more reverse stock splits with a ratio of 250 shares (or more) to one over the prior two years.

NASDAQ’s continued listing rules require that a company’s listed equity securities maintain a minimum closing bid price of at least $1.00 per share. A NASDAQ-listed company is noncompliant with this listing standard when the bid price for its listed security closes below $1.00 for 30 consecutive business days. Generally, after becoming noncompliant, a NASDAQ-listed company has a period during which it can regain compliance.[1]

Continue Reading Update: NASDAQ Temporarily Delays Implementation of Accelerated Delisting Rules During COVID-19 Pandemic

In accordance with emergency powers granted in the wake of the COVID-19 pandemic, the Internal Revenue Service (IRS) and US Department of Labor (DOL) recently issued guidance temporarily extending a number of benefit plan-related deadlines and providing other relief for participants and plan sponsors having difficulty complying with these requirements during the COVID-19 pandemic. Below is a summary of the guidance, which is posted in the Employee Benefits Resources Section.

DOL and IRS Final Rule

The May 4, 2020, Final Rule generally suspends certain benefit plan deadlines for the duration of the “Outbreak Period,” which is an open-ended period beginning March 1, 2020, and ending 60 days after the end of the COVID-19 national emergency. The relief under the Final Rule is generally aimed at participants and beneficiaries, and mostly affects group health plans.

Continue Reading IRS and DOL Issue Sweeping Deadline Relief for Benefit Plan Participants and Plan Sponsors

As we slowly begin the long process of returning to our offices, it will be very important to have a clearly defined and organized approach to identify upcoming deadlines and document important changes to our core businesses. Please join the Jones Walker SALT team as we discuss these practical issues, including specific steps to take, business changes to document, tax reduction opportunities to pursue, and some unique approaches to resolve existing state tax issues and controversies.

When: Wednesday, June 3, 2020 | 12:00 – 1:15 p.m. CDT

Presenters: Jones Walker partners Jay AdamsBill BackstromAndre BurvantJohn Fletcher, and Matt Mantle

Registration Details: Registration is complimentary.

Questions or to Register: Please contact Courtney Farley at cfarley@joneswalker.com.

This program is intended for intermediate to advanced practitioners in state and local tax administration and those doing business in Louisiana, Mississippi, Texas, and along the Gulf Coast.

On May 14, 2020, the Securities and Exchange Commission (SEC) approved the New York Stock Exchange’s (NYSE) request to make additional temporary modifications to certain shareholder approval requirements during the COVID-19 pandemic, which are similar to recent modifications made by the Nasdaq Stock Market (NASDAQ) (previously summarized here).

Together with the NYSE’s prior temporary relief (previously summarized here), these additional temporary modifications to the shareholder approval requirements are intended to enhance NYSE-listed companies’ access to capital during the COVID-19 pandemic. The NYSE’s and the NASDAQ’s temporary relief from the shareholder approval requirements are now closely aligned through June 30, 2020.

Continue Reading Update: NYSE Provides Additional Temporary Relief from Shareholder Approval Requirements during COVID-19 Pandemic

The Paycheck Protection Program (PPP) presents various risks to banks, including litigation from customers, prospective customers, and third parties, as well as enforcement actions from the government and bank regulatory agencies.

An analysis of the several dozen lawsuits filed in the months after the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act reveals that PPP litigation is trending in five preliminary categories: PPP eligibility restrictions, PPP loan prioritization, agent fees, default on debt, and False Claims Act, each detailed below with other litigation risks.

The PPP also presents regulatory risk to banks, including but not limited to nonpayment of guarantee by the US Small Business Administration (SBA), fair lending risk, Bank Secrecy Act (BSA) compliance risk, and PPP compliance risk, each detailed below.

Continue Reading Litigation and Regulatory Risks to Banks from Paycheck Protection Program

On May 19, OSHA released updated enforcement guidance for inspections related to COVID-19 complaints, referrals and severe illness reports.

In response to the reopening of many parts of the country, OSHA plans to operate within the following framework:

  • In areas where community spread of COVID-19 has significantly decreased, OSHA will return to its regular inspection policy except that it will:
    • Continue to prioritize COVID-19 cases; and
    • Use phone investigations or Rapid Response Investigations (RRIs) where OSHA may have previously performed onsite investigations.
  • In areas where community spread is elevated or there is a resurgence, OSHA will:
    • Continue to prioritize COVID-19 fatalities and imminent danger exposures for inspection. On-site inspections will be focused on hospitals and other health care providers and workplaces with high numbers of complaints or known COVID-19 cases; and
    • Use phone investigations instead of on-site inspections when they can adequately address the hazards.

OSHA also emphasizes that this guidance is intended to be time-limited to the current COVID-19 public health crisis and encourages employers to frequently check OSHA’s webpage for updates.

On May 19, the Occupational Safety and Health Administration (OSHA) revised its policy for when employers have to record COVID-19 cases in their injury and illness logs.

Under the revised policy, employers who are otherwise required to keep OSHA logs must make a determination as to whether workers’ COVID-19 cases are job-related. Previously, OSHA took the position that only healthcare employers, corrections facilities, and emergency-response providers were required to make that determination.

Continue Reading OSHA Issues Revised Enforcement Guidance for Recording Cases of COVID-19

In our previous article “COVID-19 and the Shipowner’s Legal Obligations,” published in The Maritime Executive, and through our participation in a Zoom webinar on potential vessel operator liabilities hosted in conjunction with Greater New Orleans Barge Fleeting Association, we discussed the standard of reasonable care owed under the Jones Act and an employer’s obligation to provide a reasonably safe place to work. An owner has a duty to provide a seaworthy vessel under the General Maritime Law.

Recently, a COVID-19-related wrongful death lawsuit was filed against a vessel owner/Jones Act employer in the Eastern District of Louisiana titled, Kathy Norwood v. Rodi Marine LLC, et al., Civil Action No. 2:20-cv-01404. This case has been assigned to Judge Eldon Fallon and will test the legal obligations owed by vessel owners.

Continue Reading COVID-19-Related Jones Act Suit Filed