CARES Act

As businesses that have received funds (“Borrowers”) under the CARES Act’s Paycheck Protection Program (“PPP”) execute their COVID-19 survival strategies, it is important that these survival strategies are designed to take advantage of PPP program’s defining feature for Borrowers: loan forgiveness. The PPP provides that loans made under the PPP (“PPP Loans”) may be forgiven if the Borrower meets certain criteria for the use of the PPP Loan proceeds and maintenance of employee headcount and compensation levels. The forgiveness regime is governed by Section 1106 of the CARES Act, Interim Final Rules that have been issued by the Small Business Administration (“SBA”) thereunder (including the one Interim Final Rule, issued on April 2, 2020 (“IFR #1”) and another Interim Final Rule, issued on May 22, 2020 (“IFR #14) that each specifically deal with PPP Loan forgiveness), the forgiveness application posted to the Treasury Department website on May 16, 2020 (the “Forgiveness Application”) and the Paycheck Protection Program Flexibility Act (the “PPPFA”).

On April 15, 2020, the SBA issued an Interim Final Rule (“IFR”) for the Paycheck Protection Program (“PPP”) component of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The PPP allows qualified businesses to receive loans equal to 2.5 times their average monthly payroll, up to $10 million, which may be fully forgiven if the proceeds are used for payroll and related expenses (subject to certain caps), rent, utilities, and interest on debts incurred prior to February 15, 2020. 

The Small Business Reorganization Act of 2019 is a new streamlined bankruptcy process for businesses that qualify as a small business and took effect on February 22, 2020. The act is commonly known as “Subchapter V”.

On April 15, 2020, the SBA issued an Interim Final Rule (“IFR”) for the Paycheck Protection Program (“PPP”) component of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The PPP allows qualified businesses to receive loans equal to 2.5 times their average monthly payroll, up to $10 million, which may be fully forgiven if the proceeds are used for payroll and related expenses (subject to certain caps), rent, utilities, and interest on debts incurred prior to February 15, 2020.

On April 23, 2020, the Treasury Department issued updated guidance (“FAQ 31”) regarding a confusing aspect of the CARES Act’s popular Payroll Protection Program (“PPP”). A day later, on April 24, 2020, the Treasury Department issued a new Interim Final Rule (the “IFR”) formally implementing and expanding the scope of some of the PPP guidance in FAQ 31. In applying for a PPP loan, among other things, applicants are required to certify that “current economic uncertainty makes this loan request necessary to support the ongoing operations” of the borrower (the “Necessity Certification”).

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law by President Trump on March 27, 2020, as a response to the COVID-19 pandemic. Several provisions of the CARES Act impact real estate owners. Below is a summary of the provisions of the CARES Act that are most likely to impact to owners of commercial real estate. Please refer to Moore & Van Allen’s COVID-19 Resource Center for a more comprehensive analysis of the CARES Act.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law by President Trump on March 27, 2020, as a response to the COVID-19 pandemic. Several provisions of the CARES Act impact real estate owners. Below is a summary of the provisions of the CARES Act that are most likely to impact to owners of commercial real estate. Please refer to Moore & Van Allen’s COVID-19 Resource Center for a more comprehensive analysis of the CARES Act.

As summarized below, the Department of Health and Human Services (HHS) and Office for Civil Rights (OCR) have issued a series of bulletins and other guidance regarding the ability to use and disclose protected health information during the nationwide public health emergency concerning COVID-19.  Generally, the guidance is intended to provide greater flexibility during the emergency and to communicate existing abilities to use and disclose patient information, while confirming that the HIPAA Privacy Rule’s protections are not suspended as a whole. In addition, the Coronavirus Aid, Relief and Security (CARES) Act contains provisions related to Part 2 protections and additional HIPAA guidance.

For the last three weeks or so, the federal and state banking agencies, collectively and individually, have, with increasing urgency, called on financial institutions to meet the financial needs of customers impacted by the COVID-19. Congress has now codified some of the guidance in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). To assist our clients in understanding the scale and scope of the regulatory actions, we describe the state of play as we know it today.