The IRS announced victims of Hurricane Ida now have until Jan. 3, 2022, to file various individual and business tax returns and make tax payments. This relief extends to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance. This includes the entire state of Louisiana, and taxpayers in certain Ida-impacted localities designated by FEMA in neighboring states, including southern Mississippi, will also receive the same filing and payment relief.

The tax relief postpones various tax filing and payment deadlines that occurred starting on Aug. 26, 2021, for Louisiana taxpayers, and Aug. 28, 2021, for certain Mississippi taxpayers. As a result of the relief, affected individuals and businesses will have until Jan. 3, 2022, to file various tax returns and pay various taxes that were originally due during this period. This means individuals and businesses, who had a valid extension to file their 2020 federal income tax returns, will now have until Jan. 3, 2022, to file their 2020 federal income tax returns. The IRS noted, however, that because tax payments related to these 2020 returns were due earlier in 2021, those payments are not eligible for this relief.

Continue Reading Tax Relief Available to Victims of Hurricane Ida

Continue Reading Tips for Preparing a Business Interruption Claim

Commercial enterprises doing business in Texas and surrounding states are beginning their recovery from recent power outages and associated water damage. Many face significant property losses, often accompanied by business income losses due to a complete cessation of business activities. Many business owners had the foresight to purchase business interruption insurance; however, the complexity of a business interruption claim, coupled with demands on operating capital, creates a difficult scenario for business owners. Jones Walker is ready to assist clients in navigating this process, and we offer the following “golden rules” to provide some guidance in the preparation of business interruption insurance claims.

Continue Reading Golden Rules for Preparing a Business Interruption Claim

Commercial enterprises doing business in Louisiana are beginning their recovery in the wake of Hurricane Laura. Many face catastrophic property losses, often accompanied by business income losses due to a complete cessation of business activities. Fortunately, many business owners have had the foresight to contract for business interruption insurance (also called “business income” insurance or time-element coverage). While having coverage offers some relief to affected businesses, the complexity of a business interruption claim coupled with a pressing need for operating capital creates a difficult scenario for business owners. Jones Walker is ready to assist clients in navigating this process, and we offer the following “golden rules” to provide some guidance in the preparation of business interruption insurance claims.

Continue Reading Golden Rules of Preparing a Business Interruption Claim

As Tropical Storm Marco heads toward the coast of Louisiana, reports indicate Tropical Storm Laura is expected to strengthen to a hurricane before it makes landfall on the Gulf Coast late Wednesday or early Thursday.

The very rare event of back-to-back storms is forcing evacuations, and may cause widespread damage, business interruption, and travel stoppage for a large part of the gulf coast region for days and weeks to come.

Continue Reading Jones Walker Disaster Prep & Recovery Team Readies for Gulf Coast Storms

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.

Residents of Houston, Texas held their breath once again on September 17, 2019, as Tropical Storm Imelda made landfall. The storm inundated the city with 43 inches of rain, making it the fourth-wettest tropical cyclone in the history of Texas and the fifth-wettest in the history of the continental United States.

The Texas National Guard rescued hundreds of people from communities throughout the Houston area, and hundreds of others were stranded in their vehicles as the record-breaking flood waters rapidly rose.

Still, Imelda pales in comparison to the highest-ranking storm to hit Texas, Hurricane Harvey, which struck in August 2017. Although the scale of Harvey’s damage was perhaps unexpected, one likely could have predicted in early 2017 that at least some portion of the Gulf Coast would be struck by a hurricane that year. The reality is that constructing in Texas, Louisiana, Mississippi, Alabama, or Florida in July, August, or September carries with it the very real risk that your construction site will be struck by a hurricane or tropical storm. The 2017 Atlantic hurricane season saw 17 named storms, with more than $200 billion in damages. Three of those named storms—Harvey, Irma, and Maria—made the 2017 Atlantic hurricane season the costliest ever on record.

Of course, thankfully, not every year will be a record-setter like 2017 and 2019. But constructing along the Gulf Coast or any other “disaster-prone” area carries with it unique considerations. Construction contracts almost universally include “force majeure” provisions that apply in the event of a hurricane, but force majeure provisions typically only buy the contractor some time. Moreover, such provisions are breeding grounds for disputes. For example, most force majeure clauses include hurricanes as qualifying events, but recall that “Hurricane” Harvey did most of its damage as a tropical storm. “Tropical storm” may not be included in the force majeure definition in your contract. Second, most contracts will require timely “notice” of the qualifying event, which can be difficult when you are in the midst of disaster recovery. Third, contracts and case law will often require a demonstration that the contractor acted to mitigate the effect of the force majeure event. See also In re S. Scrap Material Co., L.L.C., 713 F. Supp. 2d 568 (E.D. La. 2010) (noting that Hurricane Katrina was an “Act of God” but “[o]ne invoking Act of God as a defense must prove not only that the weather was heavy but also that it ‘took reasonable precautions under the circumstances as known or reasonably to be anticipated.’”). That sounds reasonable, but mitigation efforts at the height of a disaster are often criticized after the fact, when time and circumstance allow for analysis and reflection. Finally, the contractor must be able to show that the force majeure event caused the delay at issue. Often, however, the contractor is moving so quickly—as are the sub-contractors, suppliers, laborers, insurance companies, etc.—to deal with the disaster at hand that detailed meeting minutes, confirming emails, and contemporaneous reports are simply not able to document all the ways the force majeure event is affecting the time line of the construction project.

Contractors along the Gulf Coast cannot simply hope for the best when constructing during hurricane season. Nor can they expect to rely on insurance and force majeure provisions should the worst happen. Instead, contractors should be fully prepared with a disaster action and recovery plan before signing a contract. Indeed, owners in the Gulf Coast region—particularly in populated, industrial, burgeoning cities like Houston, and particularly following storms like Harvey and Imelda—are coming to expect their contractors on major projects to have detailed and thorough disaster contingency plans in place.

What’s in Your Disaster Action Plan?

Your disaster preparedness and recovery action plan depends on the disaster and the construction project. It should cover pre-construction disaster planning, such as identifying roles and responsibilities in the event of a disaster, identifying potential off-site quarters in the event of a local evacuation order, and creating an emergency call list, among other items. This stage—i.e., before a storm is barreling down on your project—is a good time to consider potential labor and supply shortages that typically result after hurricanes. For example, demand for construction supplies and services skyrocketed after Hurricane Harvey. Thomasnet.com, an online sourcing and supplier selection platform, analyzed searches for particular products and supplies before and after Harvey. The below tables summarize some of the results, including a 1,200 percent increase in searches for doors, a 1,700 percent increase in searches for steel buildings, and a 4,600 percent increase in searches for trucking services. See https://blog.thomasnet.com/thomasnet-trends-hurricane-harvey.

Likewise, although not on the same scale as Harvey, Imelda is sure to bring similar increases in Houston as a result of the citywide flooding, given the significant damage to hundreds of homes and other buildings. https://www.msn.com/en-us/news/us/houston-residents-face-cleanup-after-imelda-damage-2-dead-8-wounded-in-shooting-in-south-carolina/ar-AAHDUbi.
Identifying potential suppliers, labor sources, and transportation that may be available to you ahead of time could make a huge difference in your recovery and your bottom line. Remember that most force majeure clauses will not allow you to recover increased costs if the cost of materials suddenly surges after the storm. See, e.g., S&B/Bibb Hines Pb3 Joint Venture v. Progress Energy Fla., Inc., 365 Fed. Appx. 202 (11th Cir. 2010) (denying contractor’s $40 million claim after four hurricanes struck the Gulf Coast, resulting in a shortage of materials and a corresponding increase in the costs of construction for the contractor). If you are a large contractor, consider whether you have projects in other locations that could spare materials at cost until prices come down. Alternatively, consider mitigating the risk through agreements with construction companies in other locations that may be willing to “come to your aid” should you be impacted (knowing that, as part of the risk-sharing arrangement, you would be willing to reciprocate).

Your disaster action plan should also cover what to do when a storm has been predicted, when it is occurring, and after it has passed. There is plenty of hurricane-preparedness advice out there, but one source we like as a starting point is Allianz’s The Calm Before the Storm: Construction Site Hurricane Protection. This 33-page booklet, available online, includes useful information, suggestions, checklists, and forms for contractors working in hurricane-prone areas.

The point is this: as hurricane season continues along the Gulf Coast, do not be lulled into a false sense of security that (1) a storm probably won’t happen or (2) a force majeure or similar contract provision will provide adequate protection. On the Gulf Coast, hurricanes and tropical storms are a fact of life, and force majeure provisions are better left as a last resort.

With hurricane season upon us, employers are justifiably concerned about the potential impact of a natural disaster on their business. A hurricane, natural disaster, or any other crisis in the workplace, can bring a business to a screeching halt and devastate the lives of a business’ most valuable asset, its employees. This article was first published in the wake of Hurricane Katrina based on lessons learned in managing through that crisis. These lessons continue to ring true year after year, crisis after crisis. Thus, we continue to update and republish this article each hurricane season.

To minimize the impact of a natural disaster, employers should have plans in place before disaster strikes, including, for example, a crisis management plan, a communications plan, and a disaster response and recovery plan. These plans must take into account the effect a catastrophe may have on workers and include ways to help impacted employees return to work as soon as practical to ensure continued productivity of your workplace even in the face of personal loss. Any enacted plan should consider the application of relevant federal and state laws to ensure compliance and avoid any employment-related lawsuits or any agency enforcement actions following a natural disaster. Continue Reading Planning for a Catastrophe