Legal News

On October 2, 2020, the Small Business Administration published new guidance outlining the procedures that PPP borrowers and lenders must follow in the event that a PPP borrower undergoes a “change of ownership.” For parties to a merger, acquisition, or sale in which the target company or seller has received a PPP loan, the new guidance includes important requirements applicable to (i) the drafting and negotiation of the purchase agreement, and (ii) the timing for submission of the forgiveness...

On October 2, 2020, the Small Business Administration (SBA) issued Procedural Notice No. 5000-20057 addressing procedures applicable to a “change of ownership” of a borrower who has received a loan under the Paycheck Protection Program (PPP). This procedural notice sets forth important guidance as to whether or not the SBA’s prior approval is required in connection with a change of ownership......By: SmithAmundsen LLC

SBA Releases Guidance Addressing Corporate Mergers and Acquisitions in the Context of Paycheck Protection Program Loans - Many clients have been asking about the impact of a Paycheck Protection Program (PPP) Loan and the right to forgiveness in connection with a change of control, asset sale or equity transaction. We have been asking the Small Business Administration (SBA) to publish guidance since July 2020......By: King & Spalding

Businesses contemplating a merger, acquisition, or sale of assets have been working with lenders to determine what, if any, consents may be required regarding a Paycheck Protection Program (PPP) Loan. In the absence of U.S. Small Business Administration (SBA) guidance, M&A attorneys have been structuring deals in a variety of ways to maximize their client’s comfort. Finally, on October 2, 2020, the SBA issued guidance to lenders regarding what involvement, if any, by either the SBA or the PPP.....

New guidance from the Small Business Administration (SBA) sheds light on questions that arise in the context of M&A transactions where one of the companies has secured a potentially forgivable loan through the Paycheck Protection Program (PPP). Parties to such transactions must be prepared for increased scrutiny during due diligence, transaction timeline delays and certain valuation implications......By: Fox Rothschild LLP

In a previous client alert, we had advised you of issues facing a purchaser of a business which had received a Paycheck Protection Plan (PPP) loan. PPP loans are Small Business Administration (SBA) Section 7(a) loans. Consequently, they are subject to the same regulatory guidelines.. These guidelines include provisions directing lenders to obtain the consent of the SBA before allowing a borrower to perform certain activities.......By: Hinshaw & Culbertson LLP

On September 29, 2020, Judge Sarah Pitlyk, a 2019 Trump appointee to the Eastern District of Missouri, granted the Federal Trade Commission’s request for a preliminary injunction barring two thermal coal producers, Arch Resources and Peabody Energy Corporation, from creating a joint venture of their Wyoming coal mining facilities. The case is instructive for multiple reasons, including as a reminder that Section 7 of the Clayton Act is not limited to acquisitions, but can be used to challenge.....

The Mexican government announced a US$145 million (MX$300 billion) infrastructure investment plan together with private sector companies. The announcement was a follow-up to the broader national infrastructure plan announced in November 2019 and part of this year's Economic Recovery Agreement (Acuerdo para la Recuperación Económica) amid the COVID-19 pandemic....By: Holland & Knight LLP

Unforgiven Paycheck Protection Program (PPP) loans have created a great deal of consternation for PPP borrowers looking to engage in merger and acquisition (M&A) transactions, as well as other asset sale, equity and restructuring transactions that could trigger a "change in ownership" (including employee stock ownership plans (ESOPs), estate planning transfers and similar transactions in…...By: Holland & Knight LLP

On July 1, 2020, New Jersey’s Governor Phil Murphy signed the Permit Extension Act of 2020 (“PEA 2020”) into law. The PEA 2020 tolls certain state and local permit approvals, including approvals of soil erosion and sediment control plans granted by a local soil conservation district and waterfront development permits, during the pendency of the public health emergency caused by COVID-19. Additionally, the PEA 2020 extends the deadlines for those approvals that would have otherwise expired dur...