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Everything you need to know about BMD and the industry.

PPP Update: Loan Necessity Questionnaires

On October 26, 2020, the Small Business Administration (“SBA”) published a notice in the Federal Register which foreshadowed the release of two new forms seeking information from for-profit and nonprofit organizations that received Paycheck Protection Program (“PPP”) loans of $2 million or more. If approved, the SBA would use information from these forms to evaluate and determine whether economic uncertainty made a PPP loan request necessary.

Originally, as part of the PPP application process, borrowers were required to certify that current economic uncertainty made its loan request necessary to support ongoing operations – a necessity certification. Then, with the release of FAQ 31, the SBA informed borrowers that a company – private or public – with substantial market value and access to capital markets will unlikely be able to make the required necessity certification in good faith. Accordingly, FAQ 31 provided that such company should be prepared to demonstrate, upon request, the basis for its certification. In response to this guidance, BMD urged its clients to begin documenting the specific circumstances that existed to substantiate the economic uncertainty or economic need at the time they applied. If you already went through this exercise, you will have a head start on answering the questions in the newly released forms.

The two forms – For-Profit Form 3509 and Nonprofit Form 3510 – purportedly have short timelines in which they must be completed and returned to lenders (10 business days from the receipt of the form/request) and the SBA (5 business days from receipt from borrowers). The forms require accurate disclosure of facts regarding business activity and liquidity, which bear on the necessity certification. Although these forms are still subject to comment until November 25th, it is important for borrowers with loans of $2 million or more to begin to think about the questions and possible answers.

Each form’s first section will inquire about the borrower’s business activities, including:

  • Sales in Q2 2020 vs. Q2 2019
  • Were the ordered shutdowns by a state or local authority after the National Emergency Declaration by President Trump (March 13, 2020)?
  • Were operations significantly altered due to state or local shutdown orders related to COVID? How? How much did these alterations cost? Were these voluntary?
  • Were operations voluntarily reduced or ceased? Why? How long?
  • Were any new capital improvements made between March 13, 2020 and the end of your covered period not due to COVID? Why? How much money?

Each form’s second section will inquire about the borrower’s liquidity, including:

  • What were your cash and cash equivalents on the last day of the calendar quarter immediately prior to the date of your PPP application?
  • Did you make any dividends or distributions (other than for tax purposes) between March 13, 2020 and the end of your covered period? How much?
  • Were any loans paid off before contractually obligated between March 13, 2020 and the end of your covered period? How much?
  • Were any employees or owners compensated in an amount that exceeds $250,000 on an annualized basis? If so, how many? What was the total compensation for those individuals during the covered period?
  • Were any other funds received from the CARES Act? If so, what program and how much?

While both For-Profit Form 3509 and Nonprofit Form 3510 follow the same format, the Nonprofit Form 3510 asks the following:

  • What type of endowments and other non-cash investments (i.e., equity, bond and real estate holdings) do you have?
  • Any restricted funds?

Regardless of the form, borrowers should heed the following advice when it comes to these forms: 1) be truthful; 2) ensure all responses are complete and accurate; and 3) start preparing answers to the above questions now, even before the comment period closes. It is also important to note that the contents of these forms may change between now and the end of the comment period; therefore, our SBA Team is ready, willing and able to help with this process.

For more information, contact your primary BMD Attorney.

The Masks Are Back: New OSHA Regulations for Healthcare Employers

Employment Law After Hours is back with a News Break Episode. Yesterday, OSHA published new rules for healthcare facilities, including hospitals, home health employers, nursing homes, ambulance companies, and assisted living facilities. These new rules are very cumbersome, requiring mask wearing for all employees, even those that are vaccinated. The only exception is for fully vaccinated employees (2 weeks post final dose) who are in a "well-defined" area where there is no reasonable expectation that any person with suspected or confirmed COVID-19 will be present.

New OSHA Guidance for Workplaces Not Covered by the Healthcare Emergency Temporary Standard

On June 10, 2021, OSHA issued an Emergency Temporary Standard (ETS) for occupational exposure to COVID-19, but it applies only to healthcare and healthcare support service workers. For a detailed summary of the ETS applicable to the healthcare industry, please visit https://youtu.be/vPyXmKwOzsk. All employers not subject to the ETS should review OSHA’s contemporaneously released, updated Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace. The new Guidance essentially leaves intact OSHA’s earlier guidance, but only for unvaccinated and otherwise at-risk workers (“at-risk” meaning vaccinated or unvaccinated workers with immunocompromising conditions). For fully vaccinated workers, OSHA defers to CDC Guidance for Fully Vaccinated People, which advises that most fully vaccinated people can resume activities without wearing masks or physically distancing, except where required by federal, state, or local laws or individual business policies.

Employer Liability for COVID-19 Vaccine Side Effects

As employers encourage or require employees to obtain a COVID-19 vaccine, they should be aware of OSHA recording obligations and potential workers’ compensation liability. Though OSHA has yet to revise its COVID-19 guidance in response to the latest CDC recommendations, OSHA has revised its position regarding the recording of injury or illness resulting from the vaccine. Until now, OSHA required an employer to record an adverse reaction when the vaccine was required for employees and the injury or illness otherwise met the recording criteria (work-related, a new case, and meets one or more of the general recording criteria). OSHA has reversed course and announced that it will not require recording adverse reactions until at least May 2022, irrespective of whether the employer requires the vaccine as a condition of employment. In its revised COVID-19 FAQs, OSHA states:

The New Rule 1.510 - Radical Change for Summary Judgement Procedure in Florida

In civil litigation, where both sides participate actively, trial is usually required at the end of a long, expensive case to determine a winner and a loser. In federal and most state courts, however, there are a few procedural shortcuts by which parties can seek to prevail in advance of trial, saving time, money and annoyance. The most common of these is the “motion for summary judgment”: a request to the court by one side for judgment before trial, generally on the basis that the evidence available reflects that a win for that party is legally inevitable and thus required. Effective May 1, 2021, summary judgment procedure in Florida has radically changed.

Vacating, Modifying or Correcting an Arbitration Award Under R.C. 2711.13: Three-Month Limitation Maximum; Not Guaranteed Amount of Time

In a recent decision, the Supreme Court of Ohio held that neither R.C. 2711.09 nor R.C. 2711.13 requires a court to wait three months after an arbitration award is issued before confirming the award. R.C. 2711.13 provides that “after an award in an arbitration proceeding is made, any party to the arbitration may file a motion in the court of common pleas for an order vacating, modifying, or correcting the award.” Any such motion to vacate, modify, or correct an award “must be served upon the adverse party or his attorney within three months after the award is delivered to the parties in interest.” In BST Ohio Corporation et al. v. Wolgang, the Court held the three-month period set forth in R.C. 2711.13 is not a guaranteed time period in which to file a motion to vacate, modify, or correct an arbitration award. 2021-Ohio-1785.