BankruptcyandRestructuringBlog

The SBA and U.S. Treasury Announce Full “Review” of Businesses Receiving PPP Loans Greater than $2 Million

04/29/20

On April 28, 2020, U.S. Department of Treasury (Treasury) Secretary Steven T. Mnuchin and U.S.

[more]

Federal Reserve Banks and Federal Home Loan Banks May Accept Pledges of PPP Loans as Collateral

04/24/20

The Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) guarantees loans from qualified lenders to small businesses impacted by the COVID-19 pandemic so that those businesses can keep workers employed.  In the Third Interim Final Rule issued on April 20, 2020 (see 85 Fed. Reg.

[more]

Election Time: Bankruptcy Code 1111(B) in the Post-COVID World

04/23/20

Among the only certainties for the post-COVID lending world is the uncertainty of commercial real estate values.  Among the classes of real estate that surely will be immediately diminished in value are hospitality and most brick and mortar retail, but even the value of industrial and office properties will be closely scrutinized as questions are posed regarding changes in how companies conduct their businesses and which types of businesses will recover most fully.  Ignoring the obvious challenges faced by hotels, stores, movie theaters and restaurants, will office buildings ever re-fill wi

[more]

FHFA Aligns Freddie/Fannie Monthly Payment Advance Obligations

04/22/20

Responding to pressure from industry groups and members of Congress, the Federal Housing Finance Agency (FHFA) announced on April 21, 2020 that servicers of Freddie and Fannie mortgage loans will only be required to advance four months of missed payments for single family mortgage loans.  The action by the FHFA aligns the servicer advance requirements for mortgage loans in both Freddie Mac and Fannie Mae issued mortgaged-backed securities (MBS).

[more]

Computational Framework for Determining Number of Employees for Eligibility, Qualifying Loan Amount and Forgiveness for a PPP Loan

04/20/20

The Paycheck Protection Program (“PPP”), as enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, provides federally-guaranteed loans up to a maximum amount of $10 million to qualified businesses, which can be fully forgivable, to encourage businesses to retain employees through the COVID-19 crisis by assisting in the payment of certain operational costs.

[more]

Term Asset-Backed Securities Loan Facility

04/15/20

On April 9, 2020, the Federal Reserve issued an updated term sheet for the Term Asset-Backed Securities Loan Facility (“TALF”).  Under TALF, the Federal Reserve will make an equity investment of $10 billion in a special purpose vehicle (“SPV”) that will in turn make up to $100 billion of non-recourse loans fully secured by eligible ABS.   

[more]

Precautionary and Prudency Measures for Boards Addressing COVID-19 Business Uncertainties

04/10/20

The COVID-19 pandemic has caused unprecedented economic disruptions worldwide.  Businesses that were previously flourishing are now seeing rapid declines in demand and revenue, disruptions in their supply chains, and other operational interferences.  Previously projected business plans for development and expansion may no longer be feasible.  Boards of directors facing these challenges would be well served to review their legal obligations and fiduciary duties as they help guide their companies through these challenges.

[more]