On March 12, 2020, the U.S. Securities and Exchange Commission (the “SEC”) adopted amendments to the definition of “accelerated filer” and “large accelerated filer” definitions in Exchange Act Rule 12b-2, which amendments will be effective 30 days after publication in the Federal Register and will apply to annual report filings due on or after such effective date.
Continue Reading SEC Amends Definitions of “Accelerated Filer” and “Large Accelerated Filer” and Provides Relief to Small Issuers from Auditor Attestation Requirements

The World Health Organization declared the outbreak of the novel coronavirus disease (COVID-19) a pandemic, prompting numerous public and private organizations and agencies to accelerate their contingency plans so as to mitigate continued transmission. The responses to this public health concern have also introduced additional uncertainty and complexities into the process and administration of merger and acquisition transactions. Below is a list of considerations for pending and prospective acquisitions during this time of uncertainty that could help mitigate potential adverse effects.
Continue Reading Impacts of Covid-19 on Closing M&A Transactions

The COVID-19 (“coronavirus”) public health crisis has caused unprecedented business disruptions and uncertainty for existing contractual obligations.  While many are focused on whether a force majeure clause will be triggered by the recent events, contracting parties should also consider the doctrine of “Frustration of Purpose.” Under California law, the frustration of purpose doctrine may be invoked where:

  1. Performance remains possible;
  2. but the fundamental reason of both parties for entering into the contract has been frustrated by an unanticipated supervening circumstance; and
  3. it destroys substantially the value of performance by the party standing on the contract.[1]

However, to excuse nonperformance of a contract on the ground of commercial frustration, the frustration must be so severe or substantial that it is not fairly to be regarded as within the risks that were assumed under the contract.[2]
Continue Reading Frustration of Purpose – Do I Have a Defense?

The World Health Organization has labelled novel coronavirus (COVID-19) a pandemic and the global number of confirmed cases of COVID-19 has surpassed 150,000.  Companies suffering losses that they believe are attributable to COVID-19 or desiring to seek insurance to potentially cover losses resulting from COVID-19, should discuss these issues with their insurance broker(s) and risk manager(s) to assess the extent of coverage available.  While the exact legal duties owed by insurance brokers to their clients vary from state-to-state, brokers are typically required to use at least reasonable care, diligence and judgment in procuring the insurance coverage requested by an insured.
Continue Reading Insurance Considerations for Companies Impacted by Coronavirus

The Securities and Exchange Commission (the “SEC”) recently proposed amendments to modernize and simplify specific financial disclosure requirements in Regulation S-K as part of the SEC’s Disclosure Effectiveness Initiative. The proposed amendments are designed to eliminate duplicative disclosures and modernize, in particular, Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”).
Continue Reading SEC Proposal to Modernize Financial Disclosure Requirements in Regulation S-K

The coronavirus (COVID-19) outbreak has impacted publicly traded companies that have to provide information to trading markets, shareholders and to the Securities and Exchange Commission (SEC) in a number of ways. The SEC has been particularly active in acknowledging the challenges that the outbreak poses to such companies and has provided conditional relief and has issued guidance as the outbreak has developed. The SEC Enforcement Division is also on high alert for COVID-19 scams.
Continue Reading Coronavirus and Considerations for Publicly Traded Companies

The global Coronavirus Disease 2019 (“COVID-19” or “coronavirus”)  outbreak has caused supply chain disruptions to businesses around the world.  From delayed production to halted factory operations and slim shipping and freight options, the coronavirus costs keep mounting for businesses facing huge losses.  Developing a cogent response to the outbreak can be extremely challenging, given the scale of the crisis and the rate at which it is evolving.  Sheppard Mullin has mobilized a task force to assist clients address potential legal issues that may arise with respect to their supply chain or contracts.
Continue Reading The Impact of Coronavirus on Supply Chain

With the growing concern about Coronavirus Disease 2019 (“COVID-19” or “coronavirus”) some foreign nationals who live outside the U.S. have decided to fly to the U.S. and wait out the crisis.  This article discusses the related visa and immigration issues, and what U.S. Customs and Border Protection requires to admit someone into the U.S.
Continue Reading Coming to America…to Wait Out the Coronavirus — Visa & Immigration Considerations

As the number of confirmed positive cases of Coronavirus Disease 2019 (“COVID-19” or “coronavirus”) in the U.S. continues to rise, employers must prepare for issues that will inevitably arise as the virus spreads.  While the Center for Disease Control (“CDC”) currently advises that “most people in the United States will have little immediate risk of exposure,” it is prudent for employers to evaluate their organizations’ current policies and practices in the event a major outbreak occurs.  Some issues to consider include the following:
Continue Reading What Employers Need To Know To Prepare For Coronavirus

DHS recently issued a new I-9 form. This new version is mandated starting May 1. The old form expired last year and DHS had temporarily extended its validity. The new form is essentially the same as the older version. DHS made minor technical updates to the instructions. All of the pre-existing I-9 rules and regulations remain intact. The new I-9 form can be found at:  https://www.uscis.gov/i-9
Continue Reading DHS Issues New I-9 Form — Required by May 1 for New Hires and Reverifications