COVID-19 and Economic Stabilization Act, Foreclosures, Disaster Assistance Loans, and Consumer Class Actions
March 29, 2020
Authored by: Robert Klingler
The devastating impact of the Coronavirus (COVID-19) needs no introduction. BCLP has consolidated all of its client alerts regarding Coronavirus (COVID-19) as one page of resources. On that page, you can also limit by topic area, jurisdiction and areas of practice.
In this post, which is the second of many, we have highlighted some of the client alerts that we believe may be of specific importance to our community bank clients.
The Coronavirus Economic Stabilization Act of 2020, Title IV of the CARES Act provides, among other things, $500 billion to the U.S. Treasury’s Exchange Stabilization Fund to provide loans, loan guarantees, and other investments in support of eligible businesses, States and municipalities and subsidies necessary for such loans, loan guarantees and other investments. This alert summarizes what impact the Stabilization Act may have on businesses and whether those businesses may be eligible for assistance.
This alert provides an overview of the responses of courts and local and state governments of certain jurisdictions, as well as of the federal government, to the COVID-19 outbreak. The analysis has a particular focus on mortgage foreclosures and evictions, particularly in the commercial context, although information and guidance remains limited. Effects on residential foreclosures and evictions have been included as governments have tended to provide protection to residential properties first. Eventually, more state and local governments may provide guidance as to commercial foreclosures and evictions
The U.S. Small Business Administration, through its Economic Injury Disaster Loan program, is currently offering low-interest working capital loans to small businesses that have experienced a “substantial economic injury” as a result of the Coronavirus. (Note: this program is separate and distinct from the CARES Act SBA lending program discussed here. Under the CARES Act, a borrower that receives a 7(a) loan for employee salaries, payroll support, mortgage payments and/or other debt obligations would not be able to receive an EIDL for the same purpose, or co-mingle funds from another loan for the same purpose.)
The rapid spread of COVID-19 and related government public safety mandates have caused numerous companies to make difficult business decisions as well as reassess their ongoing business practices. As companies prepare for the road ahead, a new lawsuit filed in Los Angeles Superior Court about a music festival’s refund and exchange policy may signal the direction that the plaintiffs’ bar will pursue in consumer class action litigation arising out of the immediate fallout of the coronavirus. This alert analyzes how Companies can prepare themselves by reviewing their terms of service and refund exchange policies through the lens of the current limited mobility environment and by assessing how best to satisfy their customers and keep the business afloat.
Much more to follow…