Every business, regardless of industry or size, is facing unique challenges given the pandemic. Our attorneys are tracking guidance, policies, and recommendations issued by government agencies and authorities.

Clarity for PPP Loan Recipients

As most are now aware, a business can obtain a loan pursuant to the PPP of the CARES Act and have some or all of the loan proceeds forgiven if the business uses such loan for its intended purposes (75% payroll and 25% rent, primarily). There has been speculation that the CARES Act’s exclusion of forgiveness loan proceeds from income means that a business could “double dip” — namely, that the business could both exclude the forgiven proceeds from income and deduct the payroll and rent from income as business expenses. The IRS has issued a notice that this is NOT the case.

COVID-19: Global Pandemic and Society-Altering, But is It a Force Majeure?

With such immediate and far-reaching effects and the World Health Organization’s declaration of a global pandemic, it seems like this is truly an unexpected “superior force,” or as the French say, a “force majeure.” However, whether the COVID-19 virus outbreak excuses contractual performance is not a simple issue and, perhaps unsatisfyingly, the answer is a lawyerly one—“it depends.”[i] While there is no simple and universal answer, we can provide some helpful guidance on the topic.