Home » New Guidance on PPP Loan Eligibility: Hedge Funds, PE Funds, and Businesses with Access to Liquidity
New Guidance on PPP Loan Eligibility: Hedge Funds, PE Funds, and Businesses with Access to Liquidity
By Barbara A. Jones, Lee Ann Anderson, Trevor J. Chaplick, Peter H. Lieberman, Jennifer Riso, Michael J. Schaengold, Scott A. Schipma & Jennifer S. Zucker on April 26, 2020
Posted in Banking & Financial Services, Corporate & Securities, COVID-19, Global, Israel, Labor & Employment
Many Israeli companies have operations set up in the US, thus have been adversely affected by COVID-19 on both the Israeli and American fronts.
The US government recently announced adding additional funds to the PPP loans, making it possible for eligible companies, certain Israeli corporations included, to apply for funding. The US government also provided additional clarifications as to its position regarding the eligibility of companies to borrow, particularly businesses owned by large companies with adequate sources of liquidity to support the business's ongoing operations.
On April 16, 2020, the $349 billion Paycheck Protection Program (PPP), overseen by the Small Business Administration (SBA), ran out of funding as companies applied for relief. On April 24, 2020, an additional $310 billion was made available for PPP loans. Since the PPP funds ran out, there has been a public focus on companies that applied for and received PPP loans. Indeed, certain entities have announced that they planned to return funds received under the PPP or as part of other programs under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). On April 23, 2020, the SBA and Treasury Department issued guidance (released in the form of an FAQ) (FAQ Guidance) with respect to businesses owned by large companies that have received PPP funds, highlighting the complex affiliation rules and a key required certification involved in obtaining a PPP loan. The FAQ Guidance was re-emphasized in new rules that were issued on April 24, 2020 by the SBA. In both cases, the SBA stated that any borrower who applied for a PPP loan prior to the guidance and who repays its loan by May 7, 2020 will be deemed to have made its certification in good faith.
In addition to the specific certification highlighted in the FAQ Guidance and new rules discusses in the full Alert, each application requires certifications that information provided therein is true. An applicant may be exposed to significant legal consequences for false certifications or false statements. Each application is also subject to potential public disclosure under the Freedom of Information Act.
While the PPP rules (particularly the affiliation rules) can be complex, the SBA and Treasury Department have provided some clarification over the past few weeks. Borrowers (and potential borrowers) should consider their applications and applicable rules carefully with counsel, as appropriate, in light of these current developments and the safe harbor period ending on May 7, 2020.
Greenberg Traurig's Tel Aviv office attorneys who are members of the firm's COVID-19 Economic Stimulus Team include Labor & Employment Shareholder Meira Ferziger as well as Of-Counsel Ephraim Schmeidler and Associate Aaron Katz of the Corporate Practice. Our team caters to the various legal needs of Israeli clients, specifically in facing the complex and dynamic front of the effects of COVID-19.
Read the full GT Alert, "New Guidance on PPP Loan Eligibility: Hedge Funds, PE Funds, and Businesses with Access to Liquidity"
Tags: Aaron Katz, Barbara Jones, COVID-19, Ephraim Schmeidler, GT COVID-19 Economic Stimulus Team, GT Insight, Israeli companies, Jennifer Riso, Jennifer S. Zucker, Lee Ann Anderson, Meira Ferziger, Michael J. Schaengold, Peter H. Lieberman, PPP loans, Scott A. Schipma, Trevor J. Chaplick, US government
Barbara A. Jones is Co-Managing Shareholder of the firm's Los Angeles office and a member of the firm's Global Corporate practice. Barbara serves as Chair of the firm's interdisciplinary Blockchain & Digital Assets practice. Barbara maintains a diverse corporate and securities law practice
Barbara A. Jones is Co-Managing Shareholder of the firm's Los Angeles office and a member of the firm's Global Corporate practice. Barbara serves as Chair of the firm's interdisciplinary Blockchain & Digital Assets practice. Barbara maintains a diverse corporate and securities law practice across industry groups, emphasizing complex international and domestic transactions, including private and public financings, dual listings, mergers and acquisitions, strategic collaborations and joint ventures, and licensing transactions. She serves as a trusted advisor to public and private company boards of directors on governance matters and complex regulatory reporting and compliance issues. Barbara's clients include financial institutions, private equity and venture capital groups, and public and private companies in emerging technology, life sciences and biotechnology, defense and security, blockchain and digital assets, telecommunications, information technology, energy (traditional and renewable), mining, media, entertainment and sports. Barbara also represents Olympic and professional athletes and sports-related organizations.
Barbara practiced U.S. law in London from 1990 through 1997 with Sullivan & Cromwell, LLP, and headed the international capital markets practice of Kirkland & Ellis LLP from 1999 to 2003 before relocating to Boston. From 1997 to 1999, she served as Vice-President, Assistant General Counsel and Regional Counsel for capital markets with J.P. Morgan Securities Ltd. in Europe, the Middle East and Africa. Since returning to the U.S., she has continued to actively represent public and private companies, private equity groups and investment banks in the European, Scandinavian, African and greater Asian markets, including China.
Barbara is a past chair of the ABA's Subcommittee on International Securities Matters. She is a frequent speaker at conferences relating to cross-border securities matters, strategic alternatives, and digital asset structures. She serves on the Government of Bermuda's Global FinTech Advisory Board.
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Lee Ann Anderson focuses her practice on capital markets, structured finance and corporate transactions, with broad experience in U.S. and cross-border securities offerings. In the current global crisis, Lee Ann serves as a member of our COVID-19 Economic Stimulus Response Team and has…
Lee Ann Anderson focuses her practice on capital markets, structured finance and corporate transactions, with broad experience in U.S. and cross-border securities offerings. In the current global crisis, Lee Ann serves as a member of our COVID-19 Economic Stimulus Response Team and has counseled scores of companies about relief under Titles I and IV of the CARES Act and relief programs established by the Federal Reserve.
Lee Ann counsels issuers and investment banks on certificates of deposits, including rates-, commodities-, equity-, and proprietary index-linked products. She has wide-ranging experience in debt and equity capital markets, securitizations, and other structured finance transactions. Her practice has included scores of domestic and international debt and equity offerings, as well as securitizations of receivables and other collateral, complex tax-based structures utilizing swaps and other derivatives. Lee Ann also has advised a number of foreign and domestic public companies with respect to a wide range of corporate and securities matters, including reporting obligations.
Additionally, Lee Ann has deep experience counseling clients on corporate transactions, including mergers, stock purchases, asset sales, joint ventures, and other reorganization transactions. She also provides a range of general corporate and governance advice. Lee Ann has a strong commitment to pro bono work and served as a pro bono coordinator at her previous firm.
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Trevor J. Chaplick represents technology and growth companies, underwriters, private equity firms, and venture capital funds in a broad range of corporate and transactional matters, including mergers and acquisitions, public offerings, financings, as well as in general corporate and securities law matters.
Trevor has represented numerous private and public companies in merger and acquisition transactions, including: Access Health; Actel Corporation; Cypress Semiconductor; Glodon Software Co. Ltd.; InfoSpace; Intellon Corporation; Luna Innovations; Microchip Technology; Overhead Door Corporation; and U.S. Web. Investors Trevor has represented in structuring private equity and venture capital financings include: Accuitive Medical Ventures; Andreessen Horowitz; Cargill Ventures; Carlyle Ventures; Core Capital; Draper Atlantic; Inflection Point Venture Partners; International Finance Corporation; Institutional Venture Partners; New Enterprise Associates; Novak Biddle Venture Partners; Paladin Capital Group; Storm Ventures; Valhalla Partners; Warburg Pincus; and WWC Capital.
Trevor has broad international experience, having structured public and private acquisitions and investments in many countries, including the UK, China, Denmark, Finland, Germany, India, France, South Africa, Sweden, Switzerland, Belgium, and Canada. He has represented numerous companies in raising capital from institutional investors across many industries, including software, communications, the Internet, alternative energy, entertainment and media, semiconductors, healthcare, medical devices, and biotechnology.
Trevor has significant capital markets experience. He has represented issuers, underwriters, and investors in numerous public offerings, including: @Home; Access Health; Anergen; Cell Genesys; CellNet Data Systems; ChannelAdvisor Corporation; Clarify; Coinstar; Eagle Test Systems; GlobeSpan; Intellon Corporation; Luna Innovations; Maxygen; Rudolph Technologies; SmartDisk; and Ventana Medical Systems. He has represented the following underwriters in securities offerings: Banc of America; Deutsche Banc Securities; Friedman Billings Ramsey; Goldman Sachs; Lehman Brothers; Merrill Lynch; Morgan Stanley; and Robertson Stephens.
Trevor was previously a partner with Proskauer Rose and was managing partner of its Washington, D.C. office from 2007 to 2014. Prior to joining Proskauer, Trevor was a partner with Wilson Sonsini Goodrich & Rosati (WSGR), where he founded and was managing partner of the firm's first East Coast offices in Washington, D.C. and Virginia from 2000 to 2007. Before founding such offices, he spent many years practicing law in Silicon Valley with WSGR, where he also served on the firm's Operations and Strategy Committees. Trevor began his legal career at Latham & Watkins LLP in San Francisco. He is a CPA in the state of Virginia and worked in the financial services group of Arthur Andersen LLP in Washington, D.C. from 1985 to 1987.
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Peter H. Lieberman is Co-Chair of the Global Corporate Practice. He has more than 30 years of broad experience in mergers and acquisitions, private equity, public company and hedge fund transactions, start-up and venture capital financings, and complex securities trading and structuring matters.
Peter H. Lieberman is Co-Chair of the Global Corporate Practice. He has more than 30 years of broad experience in mergers and acquisitions, private equity, public company and hedge fund transactions, start-up and venture capital financings, and complex securities trading and structuring matters. Throughout his career, Peter has been involved in advising boards of directors, special committees, and controlling interest holders on conflict, governance, change of control, and similar matters. Peter brings to his work a diverse transactional background and trained at the New York law firm of Wachtell, Lipton, Rosen & Katz, where he was involved in both hostile and negotiated transactions (including proxy contests and the implementation of takeover defenses).
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Michael J. Schaengold focuses his practice on government contracts litigation and counseling, and on litigation before the U.S. Court of Appeals for the Federal Circuit and the U.S. Court of Federal Claims.
Mike is the Chair of the firm's Government Contracts Practice. His…
Mike is the Chair of the firm's Government Contracts Practice. His substantial government contracts dispute and bid protest experience includes litigation of major cases before the Government Accountability Office (GAO), the Court of Federal Claims, the Court of Appeals for the Federal Circuit and the Boards of Contract Appeals. He has represented clients in disputes involving most major departments and agencies of the U.S. government and, in recent years, has focused on procurements involving the Department of Defense, the General Services Administration, the Department of Energy, the Department of Veterans Affairs, the National Aeronautical and Space Administration, the Department of Homeland Security, the Department of Housing and Urban Development and the Department of State, among others. He has substantial experience in False Claims Act (including qui tam) and Inspector General investigations and litigation, including negotiating Settlement and Administrative Agreements related thereto; suspension and debarment matters; and drafting and implementing compliance programs.
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Scott A. Schipma focuses his practice on government contracts, public and private construction disputes, and related insurance matters. He counsels and represents clients on a wide range of publicly-funded contract issues, including award decisions, subcontracting, regulatory compliance, data rights, cybersecurity, cooperative agreements, contract
Scott A. Schipma focuses his practice on government contracts, public and private construction disputes, and related insurance matters. He counsels and represents clients on a wide range of publicly-funded contract issues, including award decisions, subcontracting, regulatory compliance, data rights, cybersecurity, cooperative agreements, contract terminations, mergers and acquisitions, lender financing, and the preparation and litigation of complex claims related to contract changes. Scott represents clients in bid protests before various state and federal agencies, boards, and forums, including the General Accountability Office (GAO), the U.S. Court of Federal Claims (COFC), the Small Business Administration (SBA), the U.S. Department of Energy (DOE), the Federal Transit Administration (FTA), the United States Postal Service (USPS), and the Federal Aviation Administration (FAA) through the Office of Dispute Resolution for Acquisition (ODRA).
Scott's practice also involves advising and representing clients involved in the construction and insurance industries. He assists clients with the prosecution and defense of claims and disputes involving national and international construction and development projects in various forums, including state and federal courts, industry arbitration panels, international arbitrations, federal and state boards, and mediations.
Before entering private practice, Scott began his legal career as an Attorney Advisor to the U.S. Navy's Naval Air Systems Command, where he advised senior leadership regarding the negotiation, award, and administration of aircraft and related weapon-systems procurements. While with the Navy, he also served as Claims Counsel for the Command, and was responsible for the resolution of numerous contractor claims.
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Jennifer S. Zucker is a shareholder in the Washington, D.C. office of Greenberg Traurig. Her practice includes a broad range of litigation, counselling and transactional matters for clients that work with federal, state, and local governments. She represents contractors in bid protests, contract
Jennifer S. Zucker is a shareholder in the Washington, D.C. office of Greenberg Traurig. Her practice includes a broad range of litigation, counselling and transactional matters for clients that work with federal, state, and local governments. She represents contractors in bid protests, contract claims and disputes, mergers and acquisitions, False Claims Act matters, and suspension and debarment proceedings. She also counsels contractors on regulatory requirements under government contracts, ethics and compliance issues, and government investigations and audits.
Jennifer's experience extends across multiple industries, including defense, aerospace, intelligence, information technology, finance, public assistance and management consulting. She maintains an active security clearance and has deep experience advising clients on national security compliance issues and representing clients in investigations and litigation involving classified programs.
Jennifer serves on the board of directors of SRC Energy, Inc., where she is chair of the Compensation Committee and serves on the Governance and Nominating Committee. She is also a Colonel in the U.S. Army Reserve.
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