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Andrews Myers
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Corporate
PPP Loan Forgiveness Application and Supplementary Guidance Released
by Mahek Bhojani and Patrick Hayes   On May 15, 2020, the SBA, in consultation with the Department of the Treasury, released the highly anticipated Paycheck Protection Program (PPP) Loan Forgiveness Application (SBA Form 3508). At the time, SBA also released a statement indicating that it would “issue additional guidance and regulations to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.”
 
The SBA delivered on its promise last Friday when it issued two interim final rules providing additional guidance on both the forgiveness application and the process to obtain forgiveness. This article provides a summary of the most immediate takeaways.
 
Loan Forgiveness Application
  • A borrower may seek loan forgiveness as early as 8 weeks following the date of the loan disbursement. To date, neither the SBA nor the Department of Treasury has promulgated a deadline for borrowers to apply for forgiveness. 
  • Payroll costs incurred and payments made during the “covered period” are eligible for forgiveness.  Payroll costs are considered “incurred” on the date that the employee’s pay is earned. Payroll costs are considered “paid” on the day the paychecks are distributed or the borrower originates an ACH credit transaction.
  • At the borrower’s election, the 8-week period for calculating the amount of payroll costs forgivable can commence on the date of the disbursement of the loan (the beginning of the covered period) or the first day of the payroll cycle for borrowers with a bi-weekly (or more frequent) payroll cycle. 
  • Non-payroll costs incurred during the covered period and paid on or before the next regular billing date (even if after the covered period) are expressly forgivable.
  • For the purposes of determining reduction in loan forgiveness, a full-time equivalent (“FTE”) employee is calculated as follows... Read More
Real Estate
Important Considerations for Landlords on Rent Deferment Requests
by Scott McKaig and Susan George     With the “Stay Home” orders and related impacts COVID-19 has had on many businesses, there has been a noticeable trend of tenants, from mom-and-pop shops to national retailers, sending letters to their landlords requesting, or purporting to assert a right, to relief from rental obligations under their leases. These letters have ranged from legal assertions claiming a right of rent abatement to focusing on a tenant’s practical ability to continue its rental obligations while their doors may remain totally or partially closed to customers.  Most of the considerations outlined in this article may also apply if a tenant has simply stopped paying rent without any communication with the landlord.  In either scenario, the landlord’s approach requires both legal and practical analysis and consideration on a case-by-case basis.
 
Many of these letters are framed by tenants as though they are exercising a right to delay or abate rent, for many months into the future.  It is critical to review the corresponding lease carefully, to determine whether the tenant’s lease actually provides for any right to delay rent under the described circumstances.  This is particularly true for commercial landlords who receive a form letter sent to all landlords of a national tenant.  It is important for landlords to understand each party’s respective rights and responsibilities under the lease at issue in order to effectively consider both the landlord’s and tenant’s options.  
 
If a tenant is purporting to exercise a right of deferment or abatement but does not cite a specific lease provision supporting such a claim, it may be helpful for both parties to clarify which lease provision the tenant is asserting.   If a tenant refers to a force majeure provision, the actual lease provision should be carefully reviewed for applicability.  Much has been written regarding force majeure provisions and whether they apply to the current circumstances. This remains subject to the specific language in each lease, but the general critical analysis involves the effect of the circumstances on the ability of the party whose performance is required to perform the particular obligation.   In many scenarios, COVID-19 will not be implicated.  Many commercial leases also specifically exclude a commercial tenant’s obligations to pay rent and other sums due under the lease from force majeure conditions... Read More
Ed Ripley in the News
As featured in the Houston Business Journal on May 11th, Ed Ripley, shareholder in the bankruptcy and restructuring practice group, talks about our firm’s positioning to help Texas businesses as they maneuver through a COVID-19 economy.   Click here for the article. 
Construction
Harris County Order Extension...What Did it Really Mean?
by Colby Hodges   Harris County Judge Lina Hidalgo amended her “Stay Home, Work Safe,” order last week, with the backing of a unanimous vote from the Harris County Commissioners Court, extending the county’s disaster declaration until June 10, 2020.  It had been previously set to expire on May 20th.  The extension came just days after Texas Governor Greg Abbott released Phase II of his statewide plan to reopen the economy, and the updated order appears to have caused some confusion.
 
In practical terms, the revised order has little impact on the existing guidelines that are already widely known, and does not conflict with or override Texas Governor Greg Abbott’s executive orders setting capacity requirements for restaurants, bars, and retail establishments.  Hidalgo’s amended order recommends – not requires – that “non-essential” employees continue to work from home. But that pool of industries has been greatly reduced given Governor Abbott’s most recent executive order which expanded what is considered “essential” and the ability of businesses to limit daily employee presence in offices and other workplaces through staggered shifts. Overall, Hidalgo’s order does not forbid businesses of most types from the phased re-opening process approved by Governor Abbott and roundly encouraged by state-level leaders.
 
Hidalgo’s order is noteworthy however, with regard to the construction and manufacturing sectors, where employees work in close quarters and, by nature of the job, typically have more human-to-human contact. The order expressly directs employers to heed guidance provided by the Texas Department of State Health Services, as well as the Centers for Disease Control.  Among other suggested practices, those government agencies suggest employers should stagger shifts to dissuade employees from congregating, implement daily temperature checks, and provide face coverings for all employees. The guidelines also suggest enhanced worksite disinfecting operations, particularly in areas of high-traffic and increased handwashing. Texas businesses are resuming operations with increasing speed, and employers should, and in our anecdotal surveys, are, already taking every step they can to protect their employees, customers, and clients. 
 
Essentially, County Judge Hidalgo’s Fourth Amended Order does nothing more than encourage safety, allows the County to continue to request and receive disaster reimbursements from the Federal Emergency Management Agency (FEMA), and aids the County in making quick-turn purchasing during the crisis.  Precinct 4 Commissioner Jack Cagle said he felt Harris County would soon be approaching the official recovery phase of the pandemic, as opposed to a continuation of the “emergency” phase, very soon.  
Important Information on COVID-19

May 19 -- Andrews Myers Monthly Law Alert | May 2020 
May 13 -- Good Faith Certification | EEOC & OSHA Updates 
May 06 -- Governor Abbott Accelerates Plan to Reopen Texas
April 28 -- Governor Abbott's Phased Plan to Reopen Texas Businesses 
April 24 -- New PPP and EIDL Funds | Employee COVID-19 Testing
April 23 -- COVID-19 Update | Harris County Face Cover Order
April 21 -- COVID-19 Update | Legal Update | 4.21.2020
April 17 -- New Orders Issued by Governor | COVID & eDiscovery
April 16 -- PPP Funds Depleted | CDC Update
April 14 -- Austin and Travis County Issue Updated Orders
April 13 -- New Programs for Small Businesses | OSHA Updates
April 07 -- PPP & 250 Billion Boost | EIDL | Austin Jobsite Poster
April 06 -- COVID-19 | Legal Update | 4.06.2020
April 03 -- Revised PPP Application| Webinar | Rising Stars
April 02 -- City of Austin Accepts GA 14 Executive Order
April 01 -- Commercial & Multifamily Construction
March 31 -- Governor Issues Support for Construction Industry
March 31 -- COVID-19 | Legal Update 3.31.2020
March 30 -- The CARES Act of 2020 Further Explained
March 29 -- The CARES Act of 2020
March 27 -- UPDATE | Providing Paid Sick Leave and FMLA
March 25 -- City of Austin Memorandum Causing Confusion
March 24 -- Stay Home, Work Safe
March 24 -- Bankruptcy and Restructuring Options
March 23 -- Not Triggering Force Majeure | Litigation Delays
March 20 -- COVID-19 | Latest Development Impacting our Clients
March 19 -- Texas Governor Issues COVID-19 Executive Order
March 19 -- Mechanic's Liens in the Time of Corona
March 19 -- Trump Signs Law to Grant Paid Sick Leave
March 17 -- CDC Guidelines & The Americans with Disabilities Act
March 16 -- Coronavirus Employment Obligations
March 13 -- COVID-19 & Force Majeure

About Andrews Myers
Celebrating 30 Years in 2020
Founded in 1990, with offices in Houston and Austin, Andrews Myers, Attorneys at Law, is a corporate law firm and recognized market leader in Texas construction law.  The firm focuses on the concentrated disciplines of commercial litigation, construction, commercial real estate, corporate and business transactions, with additional emphasis on related issues including bankruptcy and insolvency, energy, employment and capital formation. A seasoned team of attorneys provides timely and cost-effective solutions to the most complex problems facing entrepreneurs and middle-market industry leaders throughout the state and the nation. For more information please visit www.andrewsmyers.com.
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