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How to Identify and React to Fraud in the COVID-19 Era
Spilman Thomas & Battle, PLLC, May 2020

As we have learned through our ghosts of recessions past, the vast majority of those who become unable to pay their debts in economic downturns are honest, but unfortunate, debtors. That said, we also have learned that an appreciable number of debtors start taking drastic measures to preserve their assets and associated lifestyles during these times, sometimes engaging in a shell game designed to conceal or otherwise understate their assets when creditors start knocking on their door...

Revisiting Bankruptcy Filing Papers
Spilman Thomas & Battle, PLLC, May 2020

With the expectation that bankruptcy filings will increase over the next few months, this might be a good time to revisit the documents filed with a bankruptcy filing and the information they provide. The focus today is on the Notice of Bankruptcy, Petition, Schedules and Statement of Financial Affairs, which are always filed. There are several other papers that may be filed (required or not), depending on the bankruptcy case...

Subchapter V and the Single Asset Real Estate Debtor in a COVID-19 World
Spilman Thomas & Battle, PLLC, May 2020

Over a year ago, Congress amended the Bankruptcy Code to create Subchapter V, with the intent of encouraging small businesses (defined as those with less than $2,725,625.00 in debt) to file reorganization plans more often by saving certain costs of a routine Chapter 11. Congress then passed the CARES Act in response to the COVID-19 pandemic, raising the debt limit to $7,500,000.00...

Top 10 Bankruptcy Truths for Creditors to Know
Spilman Thomas & Battle, PLLC, May 2020

Much of the bankruptcy chatter arising from the pandemic world in which we find ourselves is now focusing on the cascade of new bankruptcy cases that are predicted to arrive soon. We have already seen the effects of closed stores and no foot traffic on some of the big names in retail (J.C. Penney, J. Crew, Neiman Marcus, Pier 1, etc.), but many consumer cases are sure to follow, the result of the staggering number of layoffs and lost jobs that the pandemic has caused...

PPP Math for the Self-Employed: And, Yes, There is Still Time
Verrill, May 2020

The Small Business Administration reports that as of May 23 it still had nearly $150 billion of untapped Paycheck Protection Program funds. The Program has been underutilized by self-employed business owners, in part due to complexity. Those micro-businesses, however, make up a significant slice of the U.S. economy and generally would be eligible for PPP funding. This article illustrates potential PPP benefits for a self-employed owner with no employees...

PPP Loan Forgiveness and Review: Key Observations - Part II
Dykema, May 2020

The SBA issued anInterim Final Rule(“IFR”) regarding PPP loan forgiveness on May 22, 2020, to supplement thePPP Loan Forgiveness Applicationand instructions issued one week earlier. While the new IFR did not provide a great deal of new guidance, below is a list of our key observations, which supplements our prior observations on the application itself, which are repeated at the end of this Alert...

New Measures Taken by the Chilean Authority Against the Pandemic
Carey, May 2020

I. Update of sanitary measures published this week in the Official Gazette On Wednesday, May 13, Resolution No. 341 of the Ministry of Health was published, which provides for a series of sanitary measures, among which the following stand out, since they modify measures that have been implemented to date: Any concentration of more than 50 people in a certain place, regardless of its nature, or whether it takes place in open or closed spaces, is forbidden...

New Development in Insurance Regime: Insurance Amendment Bill and Insurance Amendment (No. 2) Bill
Deacons, May 2020

Two new bills, the Insurance Amendment Bill and the Insurance Amendment (No. 2) Bill have recently been gazetted making significant changes to the regulatory regime for insurance companies. Insurance Amendment Bill Special purpose insurer An amendment is made to allow registration of an insurance company which engages in special purpose business only...

Treasury and IRS Finalize Section 385 Regulations
Dykema, May 2020

On May 13, 2020, the Department of the Treasury and the Internal Revenue Service (“IRS”) issued final regulations under Section 385 of the Internal Revenue Code (“Code”), T.D. 9897 (“Final Regulations”), which address the classification of certain related party debt as stock or equity for U.S. Federal income tax purposes...

SBA Announces: “SBA may begin a review of any PPP loan of any size at any time in SBA’s discretion” & DOJ Announces Multiple Enforcement Actions
Lowenstein Sandler LLP, May 2020

Between May 20 and May 22, SBA announced three new Interim Final Rules and the U.S. Department of Justice (DOJ) announced three new fraud prosecutions stemming from PPP loans...

Recent Conflict of Interest Cases Reveal Pitfalls for Land Use Practitioners
Hanson Bridgett LLP, May 2020

Key Points City council and planning commission recusals can have a significant impact on the outcome of hearings involving land use and environmental issues. Recusals can lead to tie votes or the loss of a quorum, which may make it impossible for local governments to approve development projects. Failing to disclose conflicts of interests can be grounds for reversing local government approvals...

Post-Covid, Foreign Investment Rules Tighten
Bradley Arant Boult Cummings LLP, May 2020

The last two years have seen an expansion of regulations related to Foreign Direct Investment (FDI), both in the United States and abroad. COVID-19 is driving further expansion of FDI in the U.S. and elsewhere. Owners and investors need to know — expansion of regulations gaps closed in national security reviews new inclusion of medical supplies and food non-controlling investments also scrutinized Whether by intent or coincidence, the U.S...

PPP Loan Forgiveness Application: Key Observations
Dykema, May 2020

The SBA, in consultation with the U.S. Department of Treasury, issued the Paycheck Protection Program Loan ForgivenessApplicationand related instructions on May 15, 2020. While the application and instructions answer many of our questions about PPP loan forgiveness, it leaves many others open. Treasury has promised that the SBA also will soon issue regulations and guidance that we hope will address these questions...

A Trustees’ Right to Obtain Information from Solicitors Firms under Section 29 of the Bankruptcy Ordinance
Deacons, May 2020

Section 29 of the Bankruptcy Ordinance (Cap. 6) (BO) allows a trustee in bankruptcy to apply to the Courts for orders compelling disclosure of material documents and/or information of the bankrupt in order for the trustee to carry out his/her duties under the bankruptcy. For the authors’ previous article on Section 29, please see here...

COVID-19: Additional, Exceptional and Temporary Measures Adopted by the Superintendency of Banks of Panama and the Panama Banking Association.
Morgan & Morgan, May 2020

Rule 2-2020, as amended by Rule 3-2020 of the Superintendency of Banks of Panama (hereinafter, “SBP,” for its initials in Spanish). On March 16, 2020, the SBP issued Rule 2-2020, which was subsequently amended by Rule 3-2020 (here in after referred to as “Rule 2-2020") and "establishes additional, exceptional and temporary measures for compliance with the provisions contained in Rule 4-2013 on credit risk".”...

CPAs Beware: Some CARES Act and FFCRA Incentives Don't Play Well Together
Bradley Arant Boult Cummings LLP, May 2020

The landmark CARES Act, signed into law by the President on March 27, provides many em­ployers with several options to increase liquidity and cash flow during the time of the COVID-19 pandemic. And only 9 days be­fore that legislation was enacted, the Families First Coronavirus Re­sponse Act (FFCRA) also created two other payroll tax-related in­centives for certain employers, and to self-employed individuals...

Hard Knock to the Legal Certainty in Guatemala - Electric Sector in Crisis
QIL+4 ABOGADOS, May 2020

Guatemala dawns today with the validity of a law, contained in the Decree 15-2020, extremely harmful for the country, the economy, the industry and legal certainty, and in violation of the Constitution. This law allows for the possibility of not paying certain basic services (water, cable, telephony, power [sic] (electric power) and internet) by the users, and imposes the obligation to public and private supplier companies not to suspend, under any circumstances, their provision...

The Use of Receiverships in Pre-Bankruptcy Litigation
Spilman Thomas & Battle, PLLC, May 2020

As we continue our series on bankruptcy litigation, we want to discuss the use of receiverships as an important aspect of a fully developed creditors' rights practice. Creditors often face recalcitrant corporate debtors who continue to reap the rewards of their business while ignoring all attempts by creditors to collect amounts owed to them. Sometimes, those debtors' intricate corporate structure makes it harder for creditors to trace money and assets and easier for debtors to hide them...

FINALLY!!! . . . SBA Guidance on the Forgiveness Math
Verrill, May 2020

The Punch Line: On Friday, May 15, the Small Business Administration published a new form entitled Loan Forgiveness Application Instructions for Borrowers which, at long last, provides a great deal of guidance on how to calculate loan forgiveness. The Background: Section 1106(b) of the CARES Act famously provides for potential forgiveness in a maximum amount equal to “the sum of [eligible] costs incurred and payments made during the covered [8-week] period...

Show Me the Money (But Don't Take it Back!): A Primer on PPP Loans, Compliance and Enforcement Webinar Recording
Bradley Arant Boult Cummings LLP, May 2020

In early April, the United States approved the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) authorizing $349 billion in a small business lending program called the Paycheck Protection Program (“PPP”). Depleted within days by the overwhelming response from businesses across the country, Congress authorized an additional $310 billion for this program on April 23. With government money, however, comes government oversight...

The Federal Reserve's Municipal Liquidity Facility: Providing Financial Relief but at What Cost?
Dinsmore & Shohl LLP, May 2020

State and local governments throughout the nation are struggling to address the financial impact of the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, enacted by Congress on March 28, 2020 appears to provide insufficient funding, and many state and local governments need more federal financial assistance...

Government Announces Penalty Formula of the Employment Support Scheme
Deacons, May 2020

The government has rolled out a series of measures to relieve the economic impact brought about by the COVID-19 pandemic. Introduced under the second round Anti-epidemic Fund, the Employment Support Scheme (ESS) has come under the spotlight as it aims to provide wage subsidies to employers against their undertaking to spend all subsidies on paying wages to their employees and not to implement redundancy during the subsidy period...

Some Lessons to be Learned from Recent SFC Enforcement Actions
Deacons, May 2020

Despite the restrictions on activity affecting Hong Kong since the beginning of the year, there have been several enforcement cases reported which can provide some useful lessons or reminders for intermediaries. Approvals involve due diligence A requirement for approval for a transaction indicates that the transaction is unusual or involves material risk...

Financial Review of the Securities Industry for 2019
Deacons, May 2020

On 16 March 2020, the Securities and Futures Commission (SFC) published its 2019 Financial Review of the Securities Industry. This is an annual review which contains statistical information about the financial situation of firms licensed for type 1 (dealing in securities) or type 8 (securities margin financing) regulated activities...

Another Case on Suitability and Inadequacies in the Fund Sales Process Results in HK$7 Million Fine
Deacons, May 2020

The Securities and Futures Commission (SFC) issued a circular on 27 March 2020 reminding the industry of the importance of compliance with the suitability obligation. Deacons’ client alert, which you can access here provides a succinct summary of the sources of the suitability obligation and the SFC’s FAQs on the subject. The alert also drew attention to the sampling and monitoring obligations under FAQ 10, which are frequently overlooked...

 

 

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