The outbreak of the novel coronavirus (“COVID-19”) is impacting businesses and public life around the world. From supply chain disruption, government-ordered closures, and event cancellations to employee safety concerns and social distancing recommendations, every company is facing its own unique challenges in the face of the uncertainties surrounding this global pandemic.
Blank Rome’s Coronavirus (“COVID-19”) Task Force (“Task Force”) is monitoring this ever-changing situation and is here to help. The Task Force is an interdisciplinary group of the Firm’s attorneys with decades of experience helping companies and individuals respond to the legal fallout from disruptive crises and disasters. Our multifaceted team includes insurance recovery, labor & employment, maritime, litigation, corporate, real estate, and cybersecurity & data privacy attorneys prepared to analyze your issues from every conceivable angle to ensure a holistic, complete, and comprehensive approach to your specific needs and issues. With offices across the United States and in China, we are ready to assist businesses that must respond and prepare for an evolving public health emergency.
- SEC Issues New Guidance on COVID-19 Considerations for Financial Reporting and Form 10-Q Disclosures & Highlights Vital Role of Audit Committees
- Illinois Bankruptcy Court Holds That Force Majeure Clause Excused Nonpayment of Rent Resulting from Government Restrictions on Business Activity
- IRS Okays Funding Employer COVID-19 Charitable Contributions from Employee Leave Donations
COVID-19 STATE IMPACT TRACKER
This user-friendly tool provides up-to-date details on state-by-state shutdown orders, employment checklists, individual and corporate tax information, and landlord/tenant implications. Find out how you can save it as a shortcut to your mobile device.
We invite you to share this page and its resources with anyone who may be impacted by COVID-19. Our Task Force will continue to monitor this significant threat and provide additional guidance for the resulting legal ramifications as the outbreak evolves in the coming days, weeks, and months.
Our Task Force has identified a variety of key issues below that are among the many that businesses and individuals are facing in light of the COVID-19 pandemic. We are here to help offer creative, proactive solutions tailored to your business and industry. Please don’t hesitate to contact any of the listed contacts for help addressing these various challenges related to this rapidly evolving crisis.
Policyholders should not presume that insurance does not apply to business losses related to COVID-19 without first carefully studying their insurance policies and law that has developed in other contexts. Some businesses may have coverage for their unique losses. Policyholders should take care to comply with all policy conditions and strategically approach their insurance claims to maximize coverage and avoid pitfalls. As businesses are assessing the possible impact of this ongoing event on their business and their employees and proactively creating plans to respond, they should consider a review of their insurance portfolio to ascertain whether coverage may be available to offset losses.
Our Insurance Recovery practice works with policyholders in a wide range of industries and takes a creative and business-minded approach to insurance. With decades of proven success in recovering billions of dollars on innovative theories, our clients turn to us for our analysis, experience, reputation, and record of success. We break new ground, making new law for our clients and shaping it for others with precedent-setting litigation, mediation, arbitration, and settlement strategies that lead to landmark rulings, new types of coverage, and major advances.
With the issuance of a pandemic declaration and related state and local closures and quarantine directives, every employer must carefully consider business continuity plans while balancing the safety of the workplace. Each workplace will present unique considerations and challenges, including:
- Employee travel
- Monitoring employee health and symptoms
- Self-quarantine directives
- Notice and reporting
- Privacy concerns
- Managing social distancing for workers in concentrated areas
- Employees with regular exposure to the public
- Reconfiguring staffing and work arrangements
- Time off and wage payment
Our Task Force is monitoring workplace developments, and as a part of our ongoing assessment activities, Blank Rome is addressing a range of workplace issues confronting global business. Our attorneys are prepared to discuss business continuity planning, available resources, legal/business guidance, and experience with other clients. We are counseling clients and providing resources on best practices for policies, communications, workplace risk assessments, preventative measures, and business disruption responses.
The issues stemming from COVID-19 are impacting all aspects of business, including commercial effects and performance-based contractual arrangements. Considerations include the interpretation of the scope of “force majeure” clauses, as well as various Uniform Commercial Code and other contractual performance defenses. What are the impacts of these clauses on your current contract relationships? How can you improve the new contracts you are considering? You should not presume the current COVID-19 circumstances will trigger these contractual defenses and should be prepared to consider adding illustrations or examples to provide clarity to “force majeure” clauses and to document circumstances to help bolster the defense applicability in any subsequent disputes.
Blank Rome’s attorneys stand ready to review your commercial contracts in the context of COVID-19 to assess how current “force majeure” clauses are likely to be interpreted together with other contractual defenses and make recommendations for drafting these clauses on both the supply and purchase side of business arrangements.
The global ramifications of the COVID-19 pandemic continues to unfold. The same uncertainties that are causing widespread fluctuation in financial markets are negatively impacting the abilities of borrowers and lenders to make accurate business performance forecasts and predict market conditions. Lenders should undertake reviews of all existing loans to assess their exposure to the outbreak and proactively allocate risk with additional cushion for buyers and sponsors in anticipation of further economic turmoil. Considerations include:
- Payment “material adverse event” clauses
- Market “material adverse event” clauses
- “Force majeure” provisions
- Maintenance covenants
- Notice requirements
- “Market flex” provisions
- Updated lender due diligence questions
- Existing commitment letters
Blank Rome’s business-minded finance attorneys are advising clients on the pandemic’s rapidly evolving impact on lending, leasing, and specialty finance. With extensive experience in structuring, negotiating, and documenting all types of complex financing transactions, our team is prepared for the changing financial environment that many industries are facing.
The uncontained spread of COVID-19 is sending shockwaves through the world economy. Restructuring and bankruptcy considerations are especially relevant to clients facing an unprecedented challenge from wide-scale business closures, slowed consumer demand, supply chain disruption, and event cancellations. The pandemic is enacting a heavy financial toll on many industries, including travel, aviation, hospitality, tourism, retail, and life sciences. Our Task Force is ready to advise clients on a broad range of restructuring and bankruptcy issues, including:
- Financial covenant defaults
- Equity cure rights
- Reporting obligations
- Use of “material adverse event” clauses
- Liquidity concerns
- Navigating defaults
While the ultimate public health impact of the pandemic remains unknown, businesses can anticipate the financial environment to deteriorate before it gets better. Blank Rome’s nationally recognized restructuring & bankruptcy team can be trusted to navigate these troubling and rapidly evolving financial conditions.
Dealmakers are facing unprecedented uncertainties as the uncontained spread of COVID-19 continues to impact the marketplace. Buyers and sellers alike may be seeking ways to back out of transactions, prevent tentative deals from falling apart, or delay closing to change the price. Considerations include:
- Whether to concede “material adverse change” or “material adverse effect” clauses.
- How to incorporate COVID-19 into definitions.
- The enforceability of “force majeure” provisions.
- The impact on representations and warranties.
- Alternative deal structures to account for valuation swings during the sign-to-close period.
- Accounting for heightened focus of due diligence on target’s insurance portfolios, employee benefits, and crisis management procedures.
- Impact on deal timing, including specific dates and interim operating covenants.
- Governance issues, including keeping board of directors updated, developing continuity plans, crisis management communication, and emergency succession plans in event of executive or director illnesses.
The Task Force is advising buyers and directors on the impact of COVID-19 so they can make informed decisions on how to proceed with negotiations in the current environment. Our team can help identify the issues that COVID-19 will have on each company’s overall business strategy, operations, customers, supply chains, and costs in the context of weighing a deal’s risks and then allocating those risks between buyers and sellers.
There may be no industry more vulnerable to the economic impact of the COVID-19 outbreak than commercial real estate as transactions worldwide are grinding to a halt. Tenants in the retail and service industries alike are suffering substantial reductions in customer flow and curtailed hours due to closures, “shelter in place” orders, quarantined employees, and social distancing recommendations. Buyers and sellers of real estate are facing logistical issues in performing due diligence, multiple delays, and other potential stumbling blocks towards completing transactions. Lenders are facing liquidity, interest rate, and underwriting concerns. Development and construction projects may be forced to close or stop. Businesses that are allowed to remain open, such as healthcare facilities, grocery stores, and pharmacies, will need to review best practices and adopt stringent property cleaning and sanitation measures to help contain the spread of viral infections.
It is imperative for clients and their counsel to review all applicable documents, including insurance policies, to understand available rights and remedies, as well as think ahead to required relief in potential new transactions. Blank Rome’s real estate team is here to help you address the unprecedented and ever-changing pandemic that is causing financial turmoil, plummeting interest rates, and an atmosphere of pessimism. We can assess your situation and offer creative solutions to help you navigate these unpredictable market conditions.
Governments have attempted to slow the spread of the COVID-19 pandemic by increasing travel restrictions, raising issues for companies seeking to comply with certain jurisdictions’ tax operating guidelines and substantive presence requirements. As domestic travel restrictions and self-quarantining measures are imposed, businesses need experienced counsel in order to determine tax filing and payment deadlines, other IRS and administrative deadlines, and state nexus for tax collection purposes. Businesses should take note that tax return and payment filing deadlines across the country could be flexible or delayed in light of the COVID-19 outbreak. Congress is also moving forward with legislation that may provide relief from the pandemic by reducing or suspending payroll taxes.
Blank Rome’s tax team, which includes attorneys who pioneered the nationwide practice of state and local tax law, can assist businesses in assessing complex tax operating guidelines, state nexus issues, deadline changes, and potential payroll tax relief. With a deep understanding of our clients’ business operations and objectives—tax and non-tax—we can craft pragmatic solutions to these complicated and rapidly evolving issues.
The heightened panic and fear caused by the COVID-19 outbreak is being taken advantage of by cyber criminals and hackers who are increasingly targeting companies and their workers with phishing e-mails and malicious links disguised as coronavirus updates. As more employees work remotely, the threats and dangers will potentially increase.
Our Cybersecurity & Data Privacy attorneys recommend vigilance and strict adherence to proper data security practices. We counsel companies on how to protect themselves by adopting cybersecurity and data privacy policies, educating their employees about the increase in coronavirus-themed attacks, and maintaining security-oriented work cultures. If you find yourself the victim of a phishing campaign, Blank Rome’s data breach incident response team is available 24/7 and can provide immediate assistance to minimize the fallout from a successful phishing attack.
The rapid spread of COVID-19 is having a major impact on shipping, supply chains, and the cruise industry worldwide. Quarantines, travel restrictions, border closings, and reporting requirements have led to delays, uncertainties, and vessels being denied entry into port. As vessels travel worldwide, owners, operators, and charterers, as well as terminals, need to be prepared to manage operational challenges and prevent the spread of COVID-19 during and after a voyage. This includes adopting protective measures for crew members and passengers, assessing the risks contractually (as well as from an enforcement perspective).
Blank Rome can provide companies with legal and business counsel in all aspects of the maritime industry. Our team is ready around the clock to respond to questions and provide advice regarding issues associated with COVID-19-related incidents, and help you manage risks, investigations, and government inquiries, including potential enforcement actions.
Concerns related to the COVID-19 pandemic present unique and difficult questions for federal contractors, many of whom have become indispensable to various government missions. As federal agencies cope with the impact of COVID-19, they may become ever more reliant on contractor assistance. At the same time, contractors will find themselves managing substantial challenges and performance impacts in their own right, including workforce and key personnel absences, travel-related logistical difficulties, supply chain disruptions, performance delays, insurance coverage questions, facility closures, complexities in subcontractor management, managing ongoing legal matters, and ad hoc departures from established practices and internal controls.
The Task Force is ready to assist contractors in navigating all aspects of government-conferred liability protection, including pharmaceutical firms, biotech companies, medtech providers, and protective gear makers that intend to supply goods or services to the government or into the marketplace as a whole.