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Paul Zimmerman
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Showing 26 posts by Samuel M. Licker.

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Paycheck Protection Program: The Sequel

The Consolidated Appropriations Act, 2021, passed this week by Congress and, as of this writing, awaiting President Trump’s signature, provides $900 billion in COVID-19-related relief. That includes additional Paycheck Protection Program money—some $280 million in all that some have dubbed “PPP2.”

If and when the 5593-page bill becomes law (Trump has suggested he might veto the legislation if Americans in need do not receive larger direct relief payments), small businesses will be able to avail themselves of another round of potentially forgivable loans. This is true whether or not they previously obtained PPP proceeds. Michelman & Robinson, LLP explains. (Read More)

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Congress Working Toward $908 Billion Coronavirus Relief Package

This month, as COVID-19 infections, hospitalizations and death rates soar, and businesses large and small and out-of-work Americans continue to feel the weight of the ongoing pandemic, lawmakers on both sides of the political aisle have been working on a compromise coronavirus aid package worth somewhere in the neighborhood of $908 billion.

Certainly, a follow-up relief plan would be welcomed by those suffering through the worst economic crisis since the Great Depression. Unfortunately, in the wake of the CARES Act (including the Paycheck Protection Program), there has been no consensus on additional financial aid at the federal level. But now, it appears the impasse may be breaking as Congress faces increasing pressure to do something as the nation stares down a seasonal surge in COVID-19 cases and the resulting economic fallout. (Read More)

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California Insurance Commissioner Issues Bulletin Notifying Insurers of Moratorium on Wildfire-Related Cancellations and Non-Renewals

Early last year, California enacted Senate Bill 824 (codified as section 675.1(b)(1) of the California Insurance Code), which serves to prohibit insurers from canceling or non-renewing policies of residential property insurance placed on homes located in certain ZIP codes for a year after the declaration of a state of emergency related to a California wildfire. The statutory provision also requires the California Insurance Commissioner to issue a bulletin informing insurers of the ZIP codes subject to the moratorium. (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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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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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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U.S. Senate Gets Additional Stimulus Conversation Started With Introduction of HEALS Act

Congress is working to agree upon a third round of stimulus to help individuals and companies still reeling from the economic and public health crisis triggered by the coronavirus pandemic. Toward that end, Republicans in the U.S. Senate have introduced the Health, Economic Assistance, Liability Protection and Schools (HEALS) Act, a nearly $1T package that includes provisions for (1) additional forgivable Paycheck Protection Program loans to help hard-hit small businesses remain viable, (2) reduced enhancement to unemployment benefits ($200 from $600) for those out of work, and (3) more $1,200 direct payments to most Americans. (Read More)

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Paycheck Protection Program Extended to August 8th

Those still wanting to apply for loans under the Paycheck Protection Program now have until August 8 to do so. The PPP, which was set to expire on June 30, has been extended by way of a bill passed by both the U.S. Senate and House of Representatives and signed into law by the President on July 4. (Read More)

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California Looks to Pass Legislation Concerning Business Interruption Coverage Due to COVID-19

The California State Senate has just amended Assembly Bill 1552 to create certain rebuttable presumptions having to do with COVID-19-related business interruption claims and disputes. In its original form, the legislation was written to adopt or revise a model curriculum in Native American studies, which is certainly a far cry from insurance regulation. In any event, Michelman & Robinson explains what it could mean for insurers if this bill, as amended, is passed and signed into law. (Read More)

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PPP Loan Deadline May Be Extended as SBA Issues New Rules Relating to Loan Forgiveness and Eligibility

Last night (June 30), with the deadline to apply for a loan pursuant to the Paycheck Protection Program set to expire—and with that nearly $130B in allocated funds being left untapped and on the table—the U.S. Senate passed an extension of the program to August 8. Whether the extension passes in the U.S. House of Representatives and is then signed into law is likely but remains to be seen; a House vote is pending as of this writing. In the meantime, attention continues to turn to the loan forgiveness process. (Read More)