Alerts & Newsletters

With SEC Form 10-Qs for the second quarter due in the next few days, and SEC Form 10‑Ks for companies with June 30 year ends due in the next few weeks, publicly traded companies that received PPP loans, even those that have had those loans forgiven, need to review and update their SEC disclosures regarding their PPP loan. That is because, even though from an accounting perspective forgiveness of your PPP loan eliminates the liability, from a legal perspective forgiveness is not necessarily the end of the process. Indeed, especially for publicly traded PPP borrowers with loans of $2 million or more, PPP loan-related disclosures are still likely required, even after the PPP loan has been forgiven.

Although we remained quite busy with deal activity during the second quarter, we had fewer deals close. All told, we had twelve deals close, averaging $26,000,000 each.

This video is the first in a series of videos from Dykema and Stout addressing PPP-related issues.

We are still waiting for the “official” SBA FAQ announcing the withdrawal of the Forms 3509/3510 Loan Necessity Questionnaire (“Questionnaire”) that, according to the SBA, will include additional information about its review process. In the meantime, PPP lenders have been told by the SBA that they no longer are required to request that borrowers who obtained loans of $2 million or more complete the Questionnaire. Seemingly coinciding with the withdrawal of the Questionnaire, however, the SBA has instead been requesting from many of these same borrowers additional information and documentation. As always feared, it appears that the SBA is viewing loan necessity in hindsight, based upon post-application events, rather than the uncertainties present at the time of application. So what should borrowers take into consideration?

In today’s Insights & Updates chat, Robert Boonin, from Dykema’s Labor & Employment Group, and James Brandell, a Government Policy Advisor from Dykema’s Washington, D.C., office, discuss what is on the Biden Administration’s agenda in terms of redirecting wage and hour law.

In a move that allows greater flexibility for travel to the United States, the State Department recently announced National Interest Exceptions (NIEs) issued to foreign nationals in the last 12 months who are covered by COVID-related Presidential Proclamations (PPs) will now be valid for 12 months, rather than the previous 30-days. In addition, these NIEs will allow for the ability to use them for multiple entries during the new validity period.

In this episode of Insights & Updates, Robert Boonin, from Dykema’s Labor & Employment Group, and James Brandell, a Government Policy Advisor in Dykema’s Washington, D.C., office, discuss the evolving legal standards for determining who are “independent contractors” versus “employees” in the eyes of the courts, the Department of Labor (DOL), and the National Labor Relations Board (NLRB). This is critical due to the Biden Administration’s apparent view being that many independent contractors are really misclassified employees, and such misclassifications expose employers to substantial liability.

President Biden recently issued the Executive Order on Promoting Competition in the American Economy (the “Order”), which affirms that it is the policy of his Administration to enforce the antitrust laws to combat concentration and abuses of economic power in several markets. For employers of any size, two particular sections regarding the labor market are important to note. These sections contemplate a rule curtailing employee non-compete agreements in all industries and a change to the Department of Justice (DOJ) and Federal Trade Commission (FTC) guidance regarding benchmarking exchanges of employee compensation information.

In today’s Five Minute Matters chat, Robert Boonin, from Dykema’s Labor & Employment group, discusses paid leave with James Brandell, who is a Government Policy Advisor in Dykema’s Washington, D.C., office.

On June 17, the Supreme Court rejected another court challenge to the Affordable Care Act (“ACA”), holding that the plaintiffs lacked standing to challenge its minimum essential coverage provisions. For the third time, the Supreme Court upheld the ACA. More than a decade after the ACA was enacted, the long and winding road of ACA challenges may be over and healthcare industry participants may finally be able to rely on the ACA as settled law moving forward.

Litigation between the Associated General Contractors of America (AGC) and the Small Business Administration (SBA) may be nearing an end. AGC seeks to compel SBA to remove and revise the Loan Necessity Questionnaires that have been going to borrowers seeking forgiveness for Payment Protection Program (PPP) loans more than $2 million. On June 23, 2021, AGC reported that it has learned in its settlement negotiations that SBA intends on withdrawing Forms 3509/3510 completely and has already begun the process.

This week, the Ninth Circuit greenlighted a shareholder’s lawsuit challenging SB 826, a relatively new California law establishing quotas for women on corporate boards. The Ninth Circuit issued a ruling reversing a district court’s dismissal of the shareholder’s suit for lack of standing to challenge the law. With the challenge now moving forward, California corporations will want to keep a close eye on this case. This alert covers the Court’s decision and highlights the law’s quotas, effective date and penalties.

On Friday, May 30, 2021, the U.S. Department of Treasury released its “General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals” (the “Green Book”). The Green Book, a copy of which is located here, provides detailed descriptions of the Biden Administration’s legislative tax proposals, which the White House formally announced on May 28, 2021, when it released its fiscal year 2022 Budget proposals.

Although the State of Michigan announced several weeks ago that employers would be permitted to require employees to return to “in-person” work, the emergency rules issued by MIOSHA prohibiting in-person work remained in place. Those emergency rules were rescinded earlier today and replaced with a new set of emergency rules that will remain in effect until October 14, 2021.

Due to the COVID-19 pandemic, sweeping new laws and regulations having a tremendous impact on California workplaces were enacted in California in 2020 and 2021. There is potential for these laws to delay or undermine the recovery of California businesses. This alert examines the many issues facing California employers surrounding vaccination and reasonable accommodations for employees.

Even before the Biden Administration proposed an increase to the capital gains rate, it has been increasingly common for a seller (“Seller”) of business assets to be approached by consultants promoting a transaction structure whereby Seller can immediately receive nearly all of the cash proceeds of the sale while also deferring the corresponding tax for as long as 30 years. The allure of receiving cash proceeds tax-free for 30 years is a powerful inducement to enter into what is commonly referred to as a “Monetized Installment Sale” (“MIS”) transaction. However, there is reason to proceed cautiously when considering MIS transactions. Furthermore, on May 7, 2021, the IRS Office of Chief Counsel released a memorandum directly, albeit succinctly, addressing MIS transactions (the “2021 IRS Memorandum”).

In a move aimed at speeding the processing of certain non-immigrant petitions, U.S. Citizenship and Immigration Services (USCIS) has announced it will suspend the biometrics requirements for certain I-539 applicants for a two-year period beginning on May 17, 2021. The biometric requirement for I-539 applicants has caused significant backlogs and delays in USCIS’ processing, causing many non-immigrants to lose their ability to work legally in the United States.

On April 28, 2021, President Biden addressed a Joint Session of Congress unveiling his proposals to invest in and restructure the American economy. In his address to Congress, President Biden formally announced his American Families Plan (the “AFP”) which combines $1 trillion in spending with $800 billion in tax cuts and credits for low and middle-class families, and targets high-income earners and corporations to fund all of the costs over a 15-year period. So what are the notable tax provisions of the plan?

Although dropping off from the record deal volume we had during the fourth quarter of 2020, this year has gotten off to a strong start. All told, we closed 17 transactions, including seven in the DSO space alone. The other 10 transactions included deals in the lighting, childcare centers, food and beverage, funeral services, entertainment, automotive, printing and graphics and accounting services industry segments. The average deal size for the first quarter of 2021 was nearly $29 million. Given the number of in-process deals currently in our pipeline, we expect our deal volume to remain high through the second quarter.

On April 19, 2021, the Michigan Department of Treasury issued a notice (the “Notice”) outlining Michigan’s conformity to the federal tax treatment of Paycheck Protection Program (“PPP”) loans under the CARES Act. The Notice also provides guidance for both individual and corporate taxpayers relating to the calculation of sales apportionment, gross receipts for corporate taxpayers, and the calculation of Total Household Resources when taking into consideration the impact of PPP loan forgiveness. This alert contains information about the Notice, as well as the guidance on the corresponding calculations.

On March 17, 2021, the IRS published IR-2021-59, postponing the deadline for filing individual income tax returns and payment of individual income taxes from April 15, 2021, to May 17, 2021. On March 29, 2021, the IRS issued Notice 2021-21, further clarifying the postponement of Federal income tax reporting and payment deadlines. The relief granted by IR-2021-59 and Notice 2021-21 does not apply to gift taxes, estimated quarterly tax payments, state or municipal taxes, or non-individual income taxes. This alert provides a detailed breakdown of which returns and deadlines are affected.

On March 31, 2021, the Biden Administration released a Fact Sheet for its proposed American Jobs Plan (the “AJP”). The full text of the AJP can be found here. Although the AJP is primarily a proposal for rebuilding our country’s infrastructure, positioning the U.S. to compete with China and creating millions of jobs, it also proposes important corporate tax changes necessary to fund the AJP.

As of today, March 31, 2021, no longer may public bodies take advantage of the “any reason” remote meeting provisions of the Open Meetings Act. With the Legislature’s prior extension of the “any reason” remote meeting period set to lapse today, and with no further legislative extension in sight, local governments have widely begun declaring a “local state of emergency” so that public bodies may be able to meet remotely. So what does this mean for public bodies that wish to continue meeting remotely? It depends on where they are located.

It is expected that President Biden will sign the PPP Extension Act of 2021 (“PPP”) passed by the House of Representatives on March 16, 2021, and the Senate on March 25, 2021. The bill extends the funding for the Paycheck Protection Program (“PPP”) Loan program through June 30, 2021, for First Draw and Second Draw Loan applications submitted by lenders to the SBA by May 31, 2021. This alert contains a list of key dates and five key observations.

Now that the American Rescue Plan Act of 2021 has passed, the focus in Congress and the Biden Administration will be moving to their next major bill as part of President Biden's Build Back Better plan. Ideas for the new bill are centering around investments in infrastructure, including transportation, water, broadband and green energy. However, in order to pay for these investments, fundamental changes to the way individuals, company and investments are taxed will also be included. While some changes may be a simple repeal of sections of a previous act, others may be completely new tax structures.

While many Americans are receiving their $1,400 payments from the American Rescue Plan Act (“ARPA”), signed into law on March 11, 2021, employers should be paying attention to the somewhat buried language regarding Families First Coronavirus Relief Act (“FFCRA”) tax credits. Does it require paid leave? How can employers take advantage of the tax credits?

The American Rescue Plan Act of 2021, (ARPA), signed into law on March 11, 2021, contains a few unexpected tax surprises. For businesses, the ARPA contains several important tax changes we highlight in great detail in this alert.

On March 8, President Biden took his first steps in reversing the Trump Administration’s Title IX policy by issuing an Executive Order 14021 (“Order”) directing the Secretary of Education to review the Title IX rules issued by the Trump Administration. 

President Biden signed the American Rescue Plan Act of 2021 on March 11, 2021. The Act provides COBRA premium subsidies, increases the tax-exclusion amount for employer-sponsored dependent care assistance programs and expands who may be eligible to receive premium tax credits for marketplace coverage. This alert explains how these provisions may impact your welfare benefit plans.

Last week, the IRS and Treasury Department announced that the Federal income tax filing due date for individuals for the 2020 tax year is automatically extended from April 15, 2021, to May 17, 2021. This relief does not apply to 2021 estimated tax payments that are due on April 15 or any subsequent date. The Federal tax filing deadline postponement to May 17, 2021, applies only to individual Federal income returns and tax (including self-employment tax) payments that would be due April 15, 2021, not state tax payments or deposits or payments of any other type of Federal tax. This alert details this relief in greater detail and also touches on some individual state extensions.

On Thursday, February 25, 2021, a Federal Court Judge in the Eastern District of Texas sided with a group of landlords by holding that the eviction moratorium instituted by the Centers for Disease Control and Prevention (CDC) is unconstitutional. Importantly, the Court declined to issue an injunction blocking the ban but noted that it expects that the CDC will respect the decision. As a result, the ban on evictions remains in place pending new developments. It is unclear whether the CDC will appeal the decision.

Is Wi-Fi sickness a disability? The California Court of Appeal just said it is in Brown v. Los Angeles Unified School District. In a case that tests the limits of California’s liberal pleading standard, the appellate court green-lighted a claim of a woman who asserted a disability of “electromagnetic hypersensitivity,” or, as the concurring justice put it, “Wi-Fi sickness.” Apart from the holding, California employers should take note of the facts alleged in the case about the failure to provide a reasonable accommodation. 

In January 2021, the U.S. Dept. of Justice (DOJ) announced $2.2 billion in False Claims Act (FCA) recoveries for fiscal year 2020. Although this amount is substantial, it nonetheless represents the smallest recovery figure in 10 years. These figures reflect the Trump administration’s unaggressive enforcement efforts and its restrictive view of the FCA. The years ahead will bring a significant increase in FCA investigations and settlements under the Biden administration. Find out what companies should do to address the upcoming surge in federal investigations and litigation.

The de novo medical device process is a little-used but potentially valuable means of securing approval for your medical device. The pathway was designed to employ a risk-based strategy for novel devices that have not yet been classified. Basically, it establishes a new device type including classification, regulation, appropriate controls and product code. The device then becomes eligible to act as a predicate for new medical devices. The following describes the origins of the de novo process, how the submission process works and its potential advantages.