The US Federal Reserve has confirmed in its Main Street Loans frequently-asked-questions-faqs about the Main Street lending program (the “FAQ”) that US subsidiaries of foreign companies can be eligible borrowers under the various loans available under the program so long as they otherwise meet the other conditions to eligibility for the loans.
Continue Reading Main Street Loan Program – US Subsidiaries of Foreign Companies Can Apply

[Update: This is an updated version of an article published to Sheppard Mullin’s Finance and Bankruptcy Blog on June 5, 2020]

On June 5, 2020, the U.S. President signed into law the Paycheck Protection Program Flexibility Act (PPP Flexibility Act or Act) to provide businesses with greater flexibility and more time to maximize forgiveness of loans received under the Paycheck Protection Program (PPP), as enacted under the Coronavirus Aid, Relief, and Economic Security Act (as amended, supplemented or otherwise modified from time to time, including, without limitation, by the Paycheck Protection Program and Health Care Enhancement Act, applicable federal regulations and interpretive guidance issued by the SBA and Treasury, the CARES Act).  The PPP Flexibility Act has been further supplemented by the (i) Joint Statement, issued on June 8, 2020 by U.S. Treasury Secretary Steven T. Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza (the Joint Statement) and (ii) Seventeenth Interim Final Rule[1], issued by the SBA on June 11, 2020.
Continue Reading [UPDATED] Paycheck Protection Program Flexibility Act: Major Changes to the PPP

On May 4, 2020, the Securities and Exchange Commission (“SEC”) issued a temporary final rule easing some restrictions on small businesses seeking to raise capital pursuant to Regulation Crowdfunding (“Reg CF”).  The SEC made the move in response to feedback from its Small Business Capital Formation Advisory Committee and other outreach conducted by SEC staff regarding the industry’s urgent need for expedited access to capital while maintaining investor protections as the COVID-19 pandemic persists.
Continue Reading SEC Offers Limited Rule Relief to Spur Small Business Crowdfunding During Pandemic

On May 12, 2020, speaking at the Securities Enforcement Forum West 2020, Steven Peikin, the co-Director of the Securities and Exchange Commission Enforcement Division, provided an overview of the division’s activities over the last several months as it has responded to the challenges created by the COVID-19 pandemic.  The Division is actively monitoring issuers and market participants for any sign of abuse of the situation, swiftly implementing interim trading suspensions where the possibility of such abuse is identified, and filing enforcement actions in record time where it determines such abuse has occurred.
Continue Reading SEC Co-Director of Enforcement Outlines Division’s Response to COVID-19

The US Treasury Department is accepting CARES Act Title IV loan applications from national security businesses to provide liquidity to offset covered losses, which include losses incurred directly or indirectly as a result of the coronavirus pandemic. The Treasury Department will review loan applications submitted by 3:00 p.m. EDT on Friday, May 1, 2020. The Treasury Department does not guarantee that applications submitted after that deadline will be reviewed.
Continue Reading CARES Act Loans Available for National Security Businesses

The current COVID-19 pandemic is causing an unprecedented negative impact on businesses around the globe in nearly every sector of the economy.  Both the US Government as well as Foreign Governments have and will continue to provide short- and long-term financial support to these businesses.  However, this financial assistance will not be available to every business, nor will it be adequate in all instances to offset decreased revenue resulting directly and indirectly from the pandemic.  As a result, many businesses will be unable to accurately forecast and will not have the necessary liquidity to ride out the pandemic, and will seek solutions to preserve value for their stakeholders, including through the pursuit of a sale.  Both strategic purchasers and institutional investors will have opportunities to purchase these businesses (or certain related assets) either through a regular sale process or under the supervision of a bankruptcy court.  Due to the nature of these sales, a number of additional issues arise that potential purchasers should bear in mind.
Continue Reading Distressed Acquisitions – Key Considerations

The New York Stock Exchange (NYSE) and The Nasdaq Stock Market LLC (Nasdaq) both took action this month to provide issuers with much needed relief in response to the economic downturn caused by the COVID-19 pandemic. We expect that these measures will provide needed flexibility to many issuers, especially smaller reporting companies who have recently experienced significant stock price volatility and are in need of capital.
Continue Reading Exchange Relief: NYSE Provides Partial Waiver for Shareholder Approval of PIPE Transactions; Nasdaq Provides Relief Regarding Continued Listing Requirements

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) allows employers to defer the deposit and payment of their share of Social Security taxes (OASDI, but not Medicare) and self-employed individuals to defer a portion of their self-employment taxes. The IRS recently published FAQs addressing specific questions about deferral of these taxes.
Continue Reading IRS Issues FAQs Addressing Deferral of Employment Tax Deposits

The IRS recently published guidance on the new refundable employment tax credits available under the Families First Coronavirus Response Act (the “FFCRA”) and the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).
Continue Reading Updated IRS Guidance Addressing COVID-19 Relief Employer Tax Credits

On April 9, 2020, the Federal Reserve issued a term sheet for each of the Primary Market Corporate Credit Facility (“PMCCF”) and the Secondary Market Corporate Credit Facility (the “SMCCF”).  Under the PMCCF and the SMCCF, the Federal Reserve Bank of New York (“Reserve Bank”) will commit to lend to a special purpose vehicle (“SPV”) on a recourse basis.  Under the PMCCF, the SPV will (i) purchase qualifying bonds as the sole investor in a bond issuance; and (ii) purchase portions of syndicated loans or bonds at issuance.  Under the SMCCF, the SPV will purchase in the secondary market eligible individual corporate bonds as well as eligible corporate bond portfolios in the form of exchange-traded funds (“ETFs”).  The Reserve Bank will be secured by all the assets of the SPV.
Continue Reading Primary And Secondary Market Corporate Credit Facilities