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Showing 15 posts from October 2020.

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Direct Physical Loss and Business Interruption Coverage in the Wake of COVID-19

Just over a week ago, Michelman & Robinson reported on the countless entities nationwide that are being denied the benefits of business interruption coverage their insurance policies provide—this despite the losses they are suffering due to COVID-19-related shutdowns and disruptions to business. While our prior alert focused on the failure of carriers to conduct thorough and proper investigations before denying these claims, here we discuss a recent judicial decision that pertains to a frequent basis for the refusal of coverage: the concepts of “direct physical loss” to property, as well as the “virus” exclusion that many policies contain. (Read More)

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California Law Now Conforms to Federal Income Tax Treatment of PPP Loan Forgiveness

Last month, Governor Gavin Newsom signed Assembly Bill 1577 into law, which amends California’s tax code as it relates to loan forgiveness under the Paycheck Protection Program.

As Michelman & Robinson has reported time and again, PPP loans are subject to forgiveness when borrowers use proceeds to pay for payroll costs, interest on mortgage obligations, rent, and utilities. More good news for borrowers is that for purposes of federal income taxation, existing federal law excludes from gross income any amounts of PPP loans that are forgiven. (Read More)

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Hope for Companies Where COVID-19-Related Business Interruption Claims Have Been Denied Without Investigation

One of the several painful effects of the COVID-19 pandemic is that countless businesses have suffered and even been forced to shutter. This is the case despite the fact that many of them have insurance policies that not only protect from damage to property, but also typically cover lost profits from business interruption. Nevertheless, companies large and small are not reaping the benefits of their insurance policies because carriers are denying business interruption claims without proper investigation. (Read More)

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PPP Loan Borrowers At Risk for Potential Federal False Claims Act Liability

As if the COVID-19 pandemic and its impact on small businesses have not been enough of a stressor and burden, these entities could face potential liability under the False Claims Act to the extent they have obtained Paycheck Protection Program (PPP) loans. That is right, it is possible that such liability will attach by virtue of the good faith certifications PPP borrowers were required to make to receive federal funding. Michelman & Robinson explains. (Read More)

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The U.S. Has Designated 18 Additional Iranian Banks for Sanctions

The U.S. government has levied additional sanctions on the Iranian financial sector that will put further strain on Tehran’s ability to access the international financial system. The designations are based upon an Executive Order President Trump issued in January 2020 giving the Secretary of State and the Secretary of Treasury the ability to impose sanctions on any part of Iran’s economy. (Read More)

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New York Amends Its Sick Leave Policy

Last April, New York enacted permanent paid sick leave to most workers starting next year.

Previously, paid sick leave was mandatory in just New York City and Westchester County. Under the new state law, however, all New Yorkers will be eligible for sick time, and companies with 100 or more employees must allow workers to accrue up to 56 hours, up from the 40 hours of paid sick time per year that employers in NYC and Westchester county were required to provide. (Read More)

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CFTC Issues Guidance on Corporate Compliance Programs

The mission of the Commodity Futures Trading Commission (CFTC) is crystal clear: “to promote the integrity, resilience, and vibrancy of the U.S. derivatives markets through sound regulation.” And with recent guidance that, as of this writing, will soon be included in the CTFC’s enforcement manual, the agency has taken another step towards achieving its stated objective. (Read More)

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For Some, PPP Loan Forgiveness Has Been Simplified

Seeking loan forgiveness just became a bit easier for those that have received loans of $50,000 or less pursuant to the Paycheck Protection Program. That is because the Small Business Administration, in consultation with the U.S. Department of Treasury, released a simplified loan forgiveness application for this category of borrowers.

The revamped application streamlines the procedure for forgiveness for PPP borrowers having loans south of $50,000, as well as their lenders. In fact, those lenders are able to process forgiveness applications much faster. (Read More)

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SBA Issues Procedural Notice Regarding PPP Loans and Changes of Ownership

Here is a question that we, at Michelman & Robinson, have fielded multiple times now: what impact does a company’s change of ownership—by way of a merger, acquisition, or otherwise—have upon existing loans issued pursuant to the Paycheck Protection Program? The Small Business Administration recently released a notice addressing this very query. Cutting to the chase: according to the SBA, it is the PPP borrower that remains responsible for its loan, regardless of any change in ownership. That being said, there are many nuances to this overall issue, which M&R breaks down here. (Read More)

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Delaware and U.S. Treasury to Collaborate on Sanctions Enforcement

Nonfinancial companies incorporated in Delaware may be in line for enhanced sanctions enforcement in the wake of an agreement recently entered between state officials and the U.S. Treasury Department.

Earlier this month, the Delaware Department of Justice and the U.S. Department of Treasury’s Office of Foreign Assets Control —which is tasked with enforcing U.S. sanctions—executed a memorandum of understanding that allows officials from Delaware and OFAC to join forces to shut down or otherwise disrupt illicit activities, including those of parties seeking to hide transactions behind anonymous entities. (Read More)