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!

Federal Reserve Expands Main Street Lending Program

On April 30th, the Federal Reserve Board announced an expansion of its Main Street Lending Program to help small and medium-sized businesses. The expansion adds additional loan options for businesses and increases the maximum size of businesses eligible for support under the program.  Although no start date for the expanded program has been announced yet, highlights of the expansion are:

  • Creating a new loan option, with increased risk sharing for borrowers with greater leverage;
  • Lowering certain loan minimums to $500,000; and
  • Expanding the pool of eligible businesses.

The Federal Reserve Board has published FAQs related to the program and you can read and download a copy at Main Street Lending Program – Frequently Asked Questions.

The US Chamber of Commerce has also published a guide to the program and you can read and download a copy at USCC Guide to Main Street Lending Program.

Once these expanded options are launched, there will be a total of three loan options—referred to as new, priority, and expanded and you can read more information about each of these loan options here:

Main Street New Loan Facility (MSNLF)

Main Street Priority Loan Facility (MSPLF)

Main Street Expanded Loan Facility (MSELF)

While there are different criteria and parameters for each of these loan options, lenders will be able to apply industry-specific expertise and underwriting standards to measure a borrower’s income and under the new program,  businesses with up to 15,000 employees or up to $5 billion in annual revenue are now eligible.

As always, if you want more information or need assistance feel free to contact me Joe Rosenbaum, or any of the Rimon Law lawyers with whom you regularly work.  Stay well. Stay safe!

 

 

Crisis Management at the Intersection of Marketing, Privacy, Security and Reputation

For those of you interested and available, on Thursday, April 23rd at 1 PM ET, Joe Rosenbaum, NY Partner at Rimon Law and chair of Rimon’s Global Alliance will be conducting a one hour seminar entitled Crisis Management at the Intersection of Marketing, Privacy, Security and Reputation touching on some of the current issues in marketing, privacy, public relations, cybersecurity & reputation management arising from the COVID-19 pandemic.

While the issues raised may well apply in many crisis situations, now, more than ever, as increased numbers of people are working, schooling and playing at home or at other remote locations, the value of online and mobile advertising and promotions has increased substantially. At the same time, the amounts of information being made available by people scrambling for information, trying to keep up with breaking news, and signing up for online, digital services and information, present legal challenges for compliance with both old and newly enacted privacy and data protection regulation. Not coincidentally, online and mobile scammers are seeking to capitalize on the growing number of inexperienced web surfing consumers and cyber criminals are using the opportunity to capture valuable personally identifiable as a result of lax or relaxed security measures. The inaccurate perception that strong security may be an obstacle to utility or speed and simply the increased number of inexperienced users accessing the Internet, provide fertile ground for exploitation. What you should know? What you can do? What you should be telling your clients and employees? What can we all do to help?

To register simply go to REGISTER: Crisis Management at the Intersection of Marketing, Privacy, Security and Reputation

The course is open to lawyers and non-lawyers, is approved for New York bar members who are eligible for 1 CLE credit per course through NY’s Approved Jurisdiction Policy and approved by the California State Bar for 1 hour of CLE credit.  Most other states recognize CA accredited courses and if you would like credit in any other state, please check your local state bar’s regulations.

IRS Issues Coronavirus Tax Relief Guidance

The U.S. Internal Revenue Service (IRS) has set up a special Coronavirus Tax Relief section on its website, in order to help taxpayers, businesses and others affected by COVID-19 obtain information regarding their tax and filing obligations, all of which have been affected by the pandemic.

While there is no information as of now regarding details of any stimulus or relief package, there is valuable information describing some temporary adjustments and suspensions of certain compliance programs, details of the Treasury’s extension of the deadlines for filing and federal tax payments to July 15, 2020 and a number of other releases providing tax-related guidance as a result of the COVID-19 outbreak.

IRS will update the information as it becomes available, so check back frequently as developments unfold.

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.

Random Acts of Kindness

It was raining when a man driving down a rural road saw an old woman stranded up ahead. He slowed his car and noticed she was hunched over the back of her Mercedes. The car was slightly tilted and the woman looked troubled. He realized she probably had a flat tire and so the man decided to pull over and help.
The old woman, who was very wealthy and wary of strangers, was concerned about the man approaching her. Was he going to hurt her? Why would someone, a complete stranger, be so ready to come to her aid on a rainy, dreary day in the middle of nowhere? But she knew she couldn’t fix the flat tire by herself and was stranded, so having little choice she thought she would let him take a look at it.
“Please don’t worry ma’am, I’m here to help you,” the man said. “My name is Bryan Anderson and I live not too far from here” and before the elderly woman knew it, he was getting the spare tire from her trunk and switching it out in record time. The old lady thanked the man and offered to pay him. Of course, he never considered taking any money and instead simply smiled at her and said, “All I ask is that you just think of me the next time you see someone in need. Just remember me and pay the kindness forward.” The man waited only a brief moment to be sure she could start the car and then he was gone down the road. The old lady was so astounded and impressed with the man’s generosity she almost felt dizzy. She drove her Mercedes half a mile up the road, saw a diner and decided to stop and freshen up a bit having been out in the rain and perhaps grab something to eat before continuing onward.
As she entered, she was greeted by a lovely smiling face. The waitress welcomed her in and even offered her a towel to dry her hair, which had gotten wet from the rain. At that point, the old lady noticed the waitress seemed to be about eight months pregnant. Though she must have been tired and weary at the end of what must have been a very long day for her, the waitress looked to be the most pleasant person on Earth.
The old lady ordered a grilled cheese sandwich and some lemonade and as she sat at the counter, noticing the waitress smiling and helpful to everyone, she remembered what Bryan Anderson had said to her. She had previously thought perhaps to look him up and reward his kindness – he said he didn’t live far away, but then she had a better idea. So she got the check, paid it quietly and left. When the waitress went to retrieve the check, she saw a $100 bill. She looked everywhere for the old lady, sure that she had probably made a mistake – she was wet and tired. But the old lady was gone – she had already driven off.
As the waitress cleared the table she saw four more $100 bills inside the napkin and it was only then, when the waitress turned the napkin over, that she noticed a handwritten note scribbled on the back. It said simply, “I have been where you are and someone very kind once helped me the way I’m helping you now and he asked me to remember his kindness. So all I’m asking you is to also remember to pay the love forward.” The waitress’s head was spinning. With the baby coming next month, it would be a tight few weeks and the money would certainly help. She folded the bills, put them in her pocket, and finished her shift.
Hours later, the waitress finally made it home after her long day. She climbed into bed and told her husband, who was half asleep beside her, the story of this kind old lady. Thinking of how lucky they truly were, she leaned over and kissed his forehead, and said simply, “I love you, Bryan Anderson.”

Seasons Greetings

Thank you for reading and visiting Legal Bytes. Each year, at this time of year, I try to post messages in the spirit of the season and often some of my own reflections at the end of one calendar year, looking forward to a new year ahead.  This year I’ve chosen a story about Franz Kafka.  When I recall reading Kafka (forced by required reading in school), I think of the “The Metamorphosis” and  a giant cockroach or works that exude alienation and hopelessness or surreal worlds filled with bureaucracy and despair. Not, as I recall, filled with compassion, love or kindness.  But having started reading books again and publishing Light Byte quotes for my blog, I came across both a quote and a story that surprised me.

“Youth is happy because it has the capacity to see beauty. Anyone who keeps the ability to see beauty never grows old.”  Yes, this is a quotation from Kafka. It surprised me.  But there was also a story – perhaps only a legend – about Franz Kafka in the last year of his life – Kafka died in June of 1924.  There appear to be multiple versions and variations to this story and many claim to have gleaned details from Kafka’s last wife, Dora Diamant.  She would have been the only one who would have possibly known most, if not all of it, if true.  We may never know if any version is true , but whether fact or fiction, the story, like all of Kafka’s writing, is complex, nuanced and meaningful on so many levels and for so many reasons, permit me to share it with you:

Franz Kafka, a literary genius widely regarded as one of the major figures of 20th Century literature, was a young man suffering from tuberculosis and dying – he was never to see his 41st birthday.  He had recently fallen in love with Dora Diamant, a young girl of nineteen or twenty who ran away from her Hasidic family in Poland and now, as a married couple, they were living in Berlin.  Most afternoons Kafka would go for a walk in Steglitz Park, often accompanied by Dora, and one day, Kafka came upon a little girl in the park, immersed in tears and sobbing her heart out.

Kafka inquired what was troubling her, and she told him she had lost her doll and was heartbroken. Trying to make her feel better, he offers to help look for the doll, but fearing the worst, he decides to tell her the doll has gone away, but has written her a letter. When she asked to see it, he told her since he didn’t know he would meet her in the park that day, he had left it at home, but would bring it to her the next day. Now if this story has any truth to it, I’m guessing this little girl was probably more than just a little suspicious at that point. But Kafka promises to return the next day with the letter from the doll – a letter he then goes home to compose.

The next day Kafka returns to the park with the letter and finds the little girl waiting. She is too young to read so he reads the letter to her. He tells her the doll is sorry, but had gotten bored and needed to get out, see the world, do new things and make new friends.  Of course, she still loves and misses the little girl very much, but her dreams of new adventures and of seeing new things has made her decide to go away for a while to do just that. But, as Kafka told the little girl, the doll promised to write her every day so she can follow her activities and know she is thinking of her.

According to the story, from that day and every day for at least the next three weeks, Franz Kafka – one of the most brilliant, talented writers in literary history – goes home to write letters from the lost doll.  Every day, in the last year of his life, knowing his remaining days on earth are dwindling, he composes these imaginary letters from a lost doll. Every day he returns to the park to read them to the little girl – a stranger he didn’t know, had never met before and whom he had run into by accident one afternoon in the park.

According to reports from Dora, he would sit down at his desk, composing letters about the doll’s adventures that were detailed, funny and captivating.  According to accounts of the story, when writing these letters Kafka dedicated himself with the same seriousness as he had when composing his own towering literary works. Fictional letters from a lost doll, intended to replace a little girls sadness with believable joy. So every day, Kafka returned to the park to read another letter to the little girl.  As the weeks went by, knowing all to well his time on earth was nearing an end, Kafka must have also been struggling with how to end this story – the moment when the letters must inevitably stop and he could no longer return to the park to read them to her.

Here is where versions of the story diverge. In one version, the doll grows up, goes to school, gets to know other people, falls in love, has a wonderful wedding and goes off to live happily ever after, somewhere in the countryside with the doll’s new husband. In this version, she bids farewell to the little girl, knowing everyone will live happily ever after.  In another version, Kafka presents the little girl with a doll – which clearly looks different than the original – which he notes, in the doll’s words: “my travels have changed me…”

We never learn what the little girl may have thought at the time, but as the story is told, many years later that little girl, now all grown up, reportedly finds the cherished doll given to her by Franz Kafka to replace the one she lost.  Stuffed somewhere in a previously unnoticed spot was a final letter from the doll, which ended with the words “every thing that you love, you will eventually lose, but in the end, love will return in a different form.”

Wishing you, your family, friends, colleagues and all those you hold dear, a joyful and meaningful holiday season, a prosperous and healthy new year filled with peace, and most of all and in all its forms . . love.

The Blockchain Ecosystem

Dror Futter, a Venture Capital and Technology Partner at Rimon, P.C. has authored a comprehensive update on the state of blockchain law, which has been published by The Journal of PLI Press, the quarterly journal of the Practicing Law Institute The Current, (Winter 2018 Edition; Vol. 2, No. 1, Winter 2018 – Page 21.   The article summarizes developments in the blockchain ecosystem to date, draws attention to considerations that participants in that ecosystem should take into account and also highlights many currently unanswered legal questions.

In addition to a growing blockchain practice, Mr. Futter focuses his practice on startup companies and their investors, and has worked with a wide range of technology companies.  You can read the entire article right here: Blockchain Law ICO Regulation and Other Legal Considerations in the Blockchain Ecosystem and if you need more information you can contact Mr. Futter directly or if you want to know more about his practice click here.  Of course, you can always contact me, Joe Rosenbaum, or any of the Rimon lawyers with whom you regularly work.

 

All Good Things Must . . . .

–          Dror Futter

So far this year, offerings of blockchain based tokens have raised over $3 billion and for a long time regulators seemed to be ignoring these Initial Coin Offerings (ICOs).  Indeed, some commentators asserted they were outside the scope of government regulation.

This past summer, the Securities and Exchange Commission (SEC) began to take aim.  While the SEC has not yet provided detailed guidance as to which tokens would be categorized as securities and which considered “utility tokens” (outside the SEC’s jurisdiction), the SEC has indicated such tokens can be securities, basing its determinations on a ‘facts and circumstances’ analysis.  Having said that, SEC Chairman Jay Clayton reportedly deviated from prepared remarks earlier this month and said: “I have yet to see an ICO that doesn’t have a sufficient number of hallmarks of a security.

Since the summer, China and South Korea have banned ICOs, while  Canada, the UK, Switzerland, Australia and most recently the EU, issued SEC-like guidance stressing that tokens may be securities and as a result, subject to the oversight of securities regulators.

In addition, the first lawsuits related to ICOs have now been filed, reminding us that regulatory action is far from the only legal risk faced by ICO sponsors of ICOs.   In one of the current lawsuits,  only one of the claims is for the sale of unregistered securities, while other claims include allegations of fraud, false advertising and unfair competition under State law. Civil suits by disappointed investors and class action lawsuits relating to large scale offerings are likely to increase in the months and years ahead.

While recent developments don’t foretell the end of ICOs, they highlight more than the typical significant legal and regulatory risks associated with early stage venture investing.  Indeed, investors may not be able to rely on the same types of legal protections they might obtain when acquiring conventional securities.  Even after the initial issuance of these ‘tokens,’ their resale could raise even more issues and compliance may affect liquidity and valuation.  In an uncertain regulatory environment, risk mitigation is an important element of counseling clients, but hardly a basis for avoiding risk altogether and clients and their lawyers have good reason to be cautious. In fact, even creating an impression that an ICO has been ‘blessed’ by lawyers may not make it clear that opinions have a significant level of assumptions, qualifications and caveats well beyond routine legal opinions.

This posting was adapted and extracted from a more detailed Client Alert written by Dror Futter, a New York-New Jersey based Partner at Rimon, P.C.  You can read the entire alert, entitled “Spoiler Alert: ICOs – The “Good Times” May Be Ending,” and if you need more information, feel free to contact Dror Futter  directly. As always, if you need any assistance you can always contact me, Joe Rosenbaum, a New York based Partner at Rimon,  or any of the lawyers at Rimon with whom you regularly work.