News

In an effort to provide support to the nation's ailing economy during the COVID-19 outbreak, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act, among other things, amends the Small Business Act (SBA) for the period from February 15, 2020 to June 30, 2020, also referred to as the "covered period," to expand the SBA loan program, making $349 billion in funds available to businesses and nonprofit organizations that would not otherwise qualify to cover expenses that would otherwise not be permitted.

Supply chains across the globe are being disrupted by the coronavirus (COVID-19) pandemic as manufacturers of “non-essential” goods curtail or completely suspend production based on worker shortages or government orders. The impacts of those realities will be felt for months or years to come by downstream businesses who assumed a certain supply of goods or raw materials when accepting orders from their customers. Given the lead times associated with manufacturing products, supply chains will not be refilled overnight. That means that many sellers may not have sufficient supplies to fill all customer orders in the short term or once the pandemic abates and consumer demand returns.  In those situations, sellers will need to carefully consider their legal obligations before picking and choosing among their customers in a limited supply context.

Locally, Governor Asa Hutchinson announced three different forms of economic aid that are or will be available to assist employers: $12 million in community development block grant funding. This is money from a program administered by the U.S. Department of Housing and Urban Development (HUD).  $4 million for a bridge loan program. The governor stated these funds will be targeted to mid-sized companies to make payments and provide working capital to help these businesses remain viable.  SBA Economic Injury Disaster Loans. The governor has declared a state of emergency for Arkansas small businesses and has sent correspondence to the Small Business Administration (SBA) requesting funds under its Economic Injury Disaster Loan Program.

To combat anticipated financial hardships occurring as a result of COVID 19, the Treasury Department has announced that taxpayers may postpone the payment of up to $1,000,000 in income taxes due for 2019 ($10,000,000 in the case of corporations) until July 15, 2020 without penalties and interest. The $1,000,000 limitation applies regardless of whether the taxpayer is filing an individual or joint return. Income tax returns are NOW DUE JULY 15.*

With the coronavirus spreading rapidly and many state and local governments mandating restrictions on large gatherings, corporations are forced to consider the impact on their upcoming annual shareholder meetings. Most companies we work with tend to hold their annual meetings during the months of April or May, meaning that proxy statements and related documentation are either in the drafting stage or have already been mailed out.