March 22 – Business Law Updates related to Covid-19
In an effort to keep you up to date, I have pulled together some highlights which I think may be important for your business:
Stay at home orders spreading across the U.S.; No order yet for PA, but likely being considered
As of this writing, outside of NY and CA, we have seen Ohio, Louisiana and Rhode Island enact stay-at home orders along with Philadelphia). Governor Wolf in PA has not ordered a similar action as of yet, but we assume that they are considering the option. A press conference is scheduled for 6pm this evening (https://www.pennlive.com/
Governor Wolf’s Non-Life Sustaining Business Location Order Enforced Monday 3/23/2020 at 8am
The enforcement of the order will begin tomorrow morning at 8am by State Troopers, local officials, State Health & Agriculture departments and the Liquor Control Board. Failure to comply could result in citations, fines or license suspensions and possibly the forfeiture of any disaster relief. If you believe you are an exempt business, please click on the following link for assistance: https://www.scribd.com/
Two Lawsuits Filed Against Governor Wolf’s Order
Two lawsuits have been filed (one an attorney and the other a gun shop owner) challenging Governor Wolf’s authority to order the shut down of non-life sustaining businesses. The PA Supreme Court has not yet weighed in. https://www.phillytrib.com/
Round three of Covid-19 related stimulus – $1 Trillion or more in Federal Aid – CARES Act
Nothing agreed to as of yet, but plans are coming out from the Republicans in the Senate and the Democrats in the House. Small business aid and focused lending to “At Risk” industries (airlines, hospitality, energy) likely be provided. See the following article for some insight: https://www.marketwatch.com/
Loan agreement covenants – time to review
For many businesses with lines of credit or outstanding loans, I do hope that you have pulled our your loan documents and understand the covenants contained in them. If not, I would suggest you take some time to review these items and discuss options with your professional advisors (attorney, CPA, banker, investment advisor).
Alternative debt structures
I am attaching an interesting piece from DealBook. In it, they discuss how private equity, venture capital and private lenders are flush with cash coming into this downturn. They could be alternative lenders or sources of capital for your business in the event that traditional commercial financing is not available.