On October 2, 2020, the Small Business Administration (SBA) published guidance on when SBA consent must be obtained before a PPP borrower undergoes a change of ownership. It not only covers changes in controlling ownership interests and certain asset sales but also could apply to redemptions of existing minority owners by PPP borrowers, and to buyouts of minority owners by other existing owners. There is potential for significant delay and disruption of deal structures. The new guidance could......
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The Small Business Administration (SBA) recently issued a Procedural Notice (the Notice) containing details about the required procedure that Paycheck Protection Program borrowers (PPP borrowers) must follow when engaging in a transaction that involves a change of ownership....By: Chambliss, Bahner & Stophel, P.C.
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The allocation of risks arising from contaminated sites, irrespective of their location worldwide, is a frequent point of discussion in M&A transactions in the chemical industry. The economic risk is high (examination, decontamination, business interruption, liability to third parties)....By: Hogan Lovells
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For several weeks, parties to pending merger and sale transactions involving Paycheck Protection Program (PPP) loans have been asking what will happen to PPP loan forgiveness applications if a borrower sells its business prior to receiving confirmation of forgiveness; a process that has barely started for most borrowers and that can last up to 150 days....By: Arent Fox
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On September 28, 2020 Governor Gavin Newsom signed into law Assembly Bill (“AB”) 1561, which extends “by 18 months the period for the expiration, effectuation, or utilization of a housing entitlement” that was in effect on March 4, 2020 and will expire prior to December 31, 2021. In its findings, the Legislature explained that the law was a necessary response to the COVID-19 public health emergency, the consequent economic recession, and the effect of both on the State’s housing affordabili...
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On October 2, 2020, the U.S. Small Business Administration (SBA) released a Procedural Notice providing guidance addressed to Paycheck Protection Program (PPP) lenders and SBA employees as to the circumstances under which prior SBA approval is required before a borrower of a PPP loan undergoes a change of ownership......By: Sheppard Mullin Richter & Hampton LLP
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In In re Mindbody, Inc. Stockholders Litigation, the Delaware Court of Chancery declined to dismiss breach of fiduciary duty claims against the chief executive officer of MINDBODY, Inc. (the Company) arising out of the Company’s 2019 sale to private equity firm Vista Equity Partners. In what is becoming an increasingly common claim in M&A litigation, the court found it reasonably conceivable that the CEO, unbeknownst to the Company’s board of directors, favored Vista in the sale process due to...
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Businesses contemplating mergers and/or acquisitions (M&A) during this worldwide pandemic have wrestled with the question of how to treat a target company that reveals an outstanding Paycheck Protection Program (PPP) loan on its books. The promissory note with the PPP lender may have a provision deeming the borrower to be in default if it changes ownership or business structure, or sells its assets, without the lender’s prior written consent......By: Husch Blackwell LLP
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The SEC has sued “cybersecurity pioneer John McAfee” for “promoting the sale of cryptocurrencies without disclosing that he was being paid to do so.” McAfee allegedly recommended “at least seven initial coin offerings to his Twitter followers from at least November 2017 to February 2018 without revealing that he earned more than $23 million to boost them.” McAfee was arrested in Spain this week after fleeing Belize in 2012 “ahead of a murder investigation there”....By: Robins Kaplan LLP
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The Paycheck Protection Program (the “PPP”) created under the CARES Act has provided much needed assistance to millions of businesses and other organizations operating in the United States that have been impacted by the COVID-19 pandemic. This program continues to evolve with the latest development addressing situations in which a PPP borrower is participating in a change of control, merger or an acquisition transaction....By: Dorsey & Whitney LLP
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