US Paycheck Protection Program (PPP) Extended

If you have been following Legal Bytes, then you know we have been following developments related to the various relief, incentive and stimulus programs being enacted and signed into law in the US (See Congress Provides Additional PPP Flexibility which includes links to many of the prior postings).

After Congressional passage of the legislation earlier last week, over this past July 4th weekend, President Donald Trump signed into law an extension of the application period for the Paycheck Protection Program (PPP) until August 8, 2020 and this morning applications were once again being accepted for the loans.  According to the SBA, there is still over $130 billion available in the fund.

We will continue to provide updates as they become available and as always, if you need more information or assistance you can always contact me, Joe Rosenbaum, or the Rimon Law lawyer with whom you regularly work. Stay safe, stay well!

PPP Loan Forgiveness Application

Following up on our previous posts (Paycheck Protection Program & Disaster Relief Loan Information Released (Updated) and Paycheck Protection Program (Updated FAQs)) this past Friday (May 15th), in consultation with the Department of the Treasury, the Small Business Administration (SBA) released the Paycheck Protection Program (PPP) Loan Forgiveness Application with detailed instructions explaining how to apply for forgiveness of PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  The announcement also states the SBA will also issue regulations and guidance to further assist borrowers as they complete their applications, and provide lenders with guidance on their responsibilities. Here are copies of the Press Release, as well as the PPP Loan Forgiveness Application with detailed instructions, you can read and download directly.

We will post further information as it becomes available.

As always, if you need more information or assistance you can contact me, Joe Rosenbaum, or any of the lawyers at Rimon with whom you regularly work. Stay safe!

 

Paycheck Protection Program & Disaster Relief Loan Information Released (Updated)

Following up on our post yesterday (US Chamber of Commerce Issues Coronavirus Small Business Guide), you can find the Paycheck Protection Program (PPP) Information Sheet for Lenders and the Paycheck Protection Program (PPP) Application Form (and accompanying instructions) just released by the US Small Business Administration.

The SBA has established a streamlined process for disaster loan assistance that you can access online at COVID-19 ECONOMIC INJURY DISASTER LOAN APPLICATION.

As noted previously, the lawyers at Rimon Law are following these developments closely and while you may already be deluged with summaries, information bulletins and alerts, we are and remain available to help any time across a broad spectrum of businesses, industries, relationships, activities and transactions that have been affected by the COVID-119 pandemic.

 

US Dept. of Labor Issues FFCRA Guidance

The U.S. Department of Labor’s Wage and Hour Division released its initial guidance providing information describing how to take advantage of the protections and relief offered by the Families First Coronavirus Response Act (FFCRA) which takes effect April 1, 2020. The guidance includes links to information for employees and employers, as well as links to questions and answers and other useful information about the FFCRA.  The DOL has a separate Coronavirus Resources webpage, providing a large number of references and links to additional information.

The US DOL has also released an FFCRA Poster that every covered employer must post in a conspicuous place on its premises, although the guidance does allow an employer to satisfy this requirement by emailing or directly mailing the notice to employees or by posting the notice on an employee information internal or external website.  Although there is no legal requirement at this time to post the notice in other languages, DOL is currently working on translating the notice.

The legal professionals at Rimon are available to help and as always, if we can’t help you – especially in these challenging times – we will assist you in finding someone who can!  Stay safe and following the recommendations of your national, state, provincial and local authorities to keep yourself, your family, colleagues and friends healthy and prevent the spread of this infection.

Marketing Hedge Funds – Why “Fiduciary” Matters

–  by  Thomas M. White

The Department of Labor (“DOL”) recently adopted a rule expanding the definition of who may be a fiduciary under ERISA.  Significant because ERISA-covered plans control enormous pools of capital and ERISA fiduciaries are prohibited from engaging in self-dealing transactions.  The new rule, which went into effect on June 9, 2017, affects how investments in hedge funds will be marketed to ERISA-covered plans and IRAs.

If a person makes a “recommendation” regarding an investment or investment management and receives a fee from a plan, a plan participant, a fiduciary, an IRA or an owner of an IRA that person will be considered a fiduciary and that definition applies even if the underlying assets are not “plan assets” within the meaning of the DOL’s Plan Asset Regulation.  If this sounds confusing, appreciate there is litigation currently pending regarding whether the DOL’s rule applies to IRAs or their owners.

Probably the most critical determination will be whether a “recommendation” has been made for purposes of this new rule.  A “recommendation” involves the purchase, holding, managing or sale of securities and is “a communication that, based on its content, context and presentation, would reasonably be viewed as a suggestion that the advice recipient engage in or refrain from taking a particular course of action.”  In fact, a series of communications may result in a “recommendation,” even if each individual communications may not rise to that level.  Although general communications are not, advice based on individual characteristics of a potential investor are likely “recommendations.”

There are a number of regulatory exemptions, such as recommendations made to a “sophisticated” adviser or investor or if an adviser offers advice to an independent plan or IRA fiduciary in an arm’s-length transaction and the adviser reasonably believes the independent fiduciary is a qualified financial institution (e.g., a bank, insurance company or a broker-dealer) or if the recipient of the information manages at least $50 million in assets regardless of whether those assets are plan assets.

Why does all this matter.  Make a presentation covering the general features of a specific hedge fund to a meeting room packed with potential investors and investment advisers.  After the formal presentation concludes, an audience member comes over to the presenter, describes himself as an IRA owner and his particular circumstances – a discussion ensues.  If the speaker isn’t careful about what is said, and a fee may be earned by the hedge fund it may be a problem.  There are other examples too numerous to describe here.

To minimize the likelihood they will be considered fiduciaries under the new rule, hedge funds should determine if they want to market to IRAs, small plans and individuals who have investment discretion over the investments in their profit sharing and 401(k) accounts.  Marketing materials should be reviewed to determine if they need to be modified to avoid a problem.  Even subscription agreements should make it clear the potential investor is not a small plan or an IRA unless it is being advised by an investment professional who fits under the exemption. Marketing professionals should be trained as to what they may and may not say and written reports describing conversations and communications with potential investors should be retained.

If you want to read more about the potential application of this new rule you can read the entire Rimon Client Alert or contact Tom White directly.  Mr. White specializes in the full scope of human resources management, such as Employee Benefits and Executive Compensation, Healthcare, and Employment Law.