SBA Releases Loan Necessity Questionnaire for PPP Borrowers

On October 26, 2020, the Small Business Administration (SBA) issued a notice in the Federal Register that, among other updates, announced two new forms, 3509 and 3510 (the Forms),  related to the Paycheck Protection Program (PPP).  Form 3509 is for for-profit businesses, while 3510 applies only to non-profit entities.  These Forms will be sent by PPP lenders only to PPP borrowers who received a principal loan amount of $2 million or more, and borrowers will have ten days to complete it.  According to . . . Read More

Important Considerations When Structuring M&A Transactions for Government Contractors: Post-Transaction Pitfalls—Part 3 of a 3-Part Series

M&A transactions involving government contractors are subject to a host of regulatory and industry-specific considerations. This blog series covers key concerns that can impact a deal. Parts 1 and 2 focus on common problems that arise before and during a transaction. They are available here and here . Below we drill down on post-transaction pitfalls in government contractor M&A transactions that can jeopardize the value of the target company. Security Clearances Many contracts require a company to maintain a facility security clearance. . . . Read More

8 Tips to Manage Risks in Healthcare Transactions

In a typical investment or acquisition, the buyer conducts due diligence of the target company. Due diligence involves extensive review of the target company’s history, finances, and operations, including its contracts, customer and supplier relationships, and employees, to understand the risks and opportunities associated with the investment or acquisition. Healthcare companies have their own unique requirements and structures, so a buyer’s due diligence must consider and thoroughly evaluate these additional factors to mitigate the buyer’s risk post-closing. Professional Corporations and . . . Read More

SBA Issues Guidance for PPP Lenders on Required Consents for Change in Ownership of PPP Borrowers

On Friday, October 2, the U.S. Small Business Administration (SBA) issued guidance for lenders administering loans under the Paycheck Protection Program (PPP) regarding what involvement by the SBA (if any) is required when a PPP borrower undergoes a transaction resulting in a change in ownership.  This guidance addresses several questions with which PPP borrowers and lenders have been struggling over the past several weeks and provides clarity around what the expectations are for when SBA consent is required and what . . . Read More

BLOG: 10 Questions to Ask for a Successful Government Contracts Novation

Government contractor acquisitions present unique regulatory hurdles, and one major challenge is the preparation, submission, and execution of a novation package with the U.S. government. While the novation package itself is a hurdle, there are additional factors that impact its success. Below are ten questions government contractors should ask, which can spell the difference between a successful and unsuccessful novation. Novation Package Documentation Novation is required for the transfer or assignment of a federal government contract from one entity to . . . Read More

BLOG: Stockholders and Board Directors: Overview of COVID-Related Changes to Title 8 of Delaware General Corporation Law

On July 16, 2020, Governor John Carney of Delaware signed into law House Bill 341 to amend Title 8 of the Delaware General Corporation Law (DGCL) which, among other things, (1) solidifies a pandemic as an emergency situation, (2) expands the special powers of stockholders and directors during such emergency conditions, and (3) allows for the option to use electronic transmission documentation and electronic signatures for the execution of documents (previously limited to hardcopy and manual execution only).  While DGCL § 110(a) already . . . Read More

BLOG: Investing in or Acquiring a Medical Provider? Costs of Improperly Reporting Medicare Changes in Ownership (CHOW)

When an investor desires to invest in or acquire a medical provider, the investor must understand how the transaction may affect the provider’s Medicare enrollment. Depending on the structure of the transaction, the provider must report certain changes in the provider’s ownership to the Centers for Medicare & Medicaid Services (“CMS”). Compliance with CMS’s notification requirements permits the provider to continue participating in the Medicare program under its provider agreement with minimal, if any, delays or issues. However, if the . . . Read More

BLOG: New Judicial Order Offers Clarity on Maryland Statutes of Limitations Impacted by COVID-19

Early during the COVID-19 pandemic, a number of state-level court systems, including Maryland’s courts, declared judicial emergencies and issued orders automatically tolling, or postponing, the expiration of statutes of limitations [1] for claims filed within those states. These orders offered plaintiffs a reprieve from the strict filing deadlines. Now, as Maryland begins the process of reopening its court systems to the public, the state’s highest court has issued an order offering clarity as to the new filing deadlines for the expiration of . . . Read More

BLOG: HHS Provides Guidance on the CARES Act’s Provider Relief Fund

Under the CARES Act, Congress set aside $100 billion for the Public Health and Social Services Emergency Fund (the Provider Relief Fund) to reimburse healthcare providers for healthcare-related expenses or lost revenues attributable to the Coronavirus (COVID-19); the Paycheck Protection Program and Health Care Enhancement Act, which President Trump signed into law, will provide an additional $75 billion to the Provider Relief Fund. Eligible healthcare providers that provide diagnoses, testing, or care for individuals with possible or actual cases of . . . Read More

BLOG: Delaware Allows Public Companies to Hold Remote Shareholder Meetings

On April 6, 2020, Governor John Carney of the State of Delaware issued the Tenth Modification of the Declaration of a State of Emergency for the State of Delaware Due to a Public Health Threat (the “Declaration”). The initial declaration was issued on March 12, 2020. Among other matters relevant as a result of the COVID-19 pandemic, the Declaration touches on a change in shareholder meetings related to publicly traded companies organized in the State of Delaware. In line with the social distancing principles adopted by all businesses, the Declaration allows the board of directors of companies that issued notices for . . . Read More