Bell Nunnally & Martin LLP RSS Feed May 2020 00:00:00 -0800firmwise Partner Chris Trowbridge on The Texas Lawbook Comments on Firm's Growth, State of Legal Market<p>Bell Nunnally Managing Partner Christopher B. Trowbridge is quoted in <i>the Texas Lawbook</i> article &ldquo;The Texas Middle Market &ndash; Flat or Firm, Stable or Stale?&rdquo; The feature examines the growth prospects and financial footing of middle market corporate law firms across Texas.</p> <p>&ldquo;The firm had a remarkable 2019,&rdquo; said Trowbridge.</p> <p>Looking at the firm&rsquo;s prospects for 2020 and beyond, Trowbridge commented, &ldquo;Our labor and employment lawyers have been working around the clock.&rdquo; He also mentions in the article that the firm&rsquo;s bankruptcy and creditor&rsquo;s rights lawyers have experienced a sharp increase in demand.</p> <p>&ldquo;Midsized law firms like ours are able to be price flexible in providing legal services, which I think benefits us tremendously in hard economic times like these,&rdquo; Trowbridge commented. &ldquo;It is important to remain nimble and entrepreneurial,&rdquo; he said. &ldquo;It&rsquo;s our job to find solutions for clients.&rdquo;</p> <p>To read the full article, please click <a href="">here</a>.</p>News26 May 2020 00:00:00 -0800, Litigation Chair Tammy Wood on ABA's Woman Advocate Looks at Obstacles, Steps For Women Lawyers to First Chair Trials<p>Partner and Litigation Chair Tammy S. Wood authored the American Bar Association (ABA) <i>The Woman Advocate</i> article &ldquo;Taking the First Chair.&rdquo; Her piece offers advice for young women lawyers seeking first-chair opportunities at trial.</p> <p>Wood notes that hard work builds a solid reputation &ndash; critical for fostering trust and generating opportunities:</p> <p><i>To build your reputation, you must do good work and find ways to tell others in the firm when you have had success to build that reputation. You build a reputation for working hard by actually working hard. </i></p> <p>Wood also notes that willingness to put one&rsquo;s self out for work is crucial:</p> <p><i>It is those who speak up first and say &ldquo;I will do that&rdquo; are the ones who get the job. Be that person. The worst that can happen is the response is &ldquo;No&rdquo; or &ldquo;Not yet&rdquo; or &ldquo;Not that, but this.&rdquo;</i></p> <p>To read the full article, please click <a href="">here</a>.</p>News26 May 2020 00:00:00 -0800 Issues Impacting the Live Event and Entertainment Industries in the Wake of COVID-19<strong>Event Details:</strong><br /> <br /> Senior Associates Saba Syed and Brent Turman and Associate Ira Perez are presenting the CLE &quot;Legal Issues Impacting the Live Event and Entertainment Industries in the Wake of COVID-19&quot; for the Tarrant County Young Lawyers Association.<br /> <strong><br /> Date/Time:</strong><br /> <br /> May 21, 2020<br /> <strong><br /> Overview:</strong><br /> <br /> The panelists will focus on industry-specific issues impacting clients in these industries and will cover topics ranging from event cancellation insurance, <em>force majeure</em> clauses in entertainment contracts, and the recent legislative enactments to help business owners in this industry. The CLE will also include a litigation update for clients who are in litigation or are considering litigation.<br /> <br /> For more information and to register, please click <a href="">here</a>. <br /> <br /> This has been approved for 1 hour CLE credit, including 0.25 hour of ethics credit.<br /> <br />Events21 May 2020 00:00:00 -0800 Russell Mills Comments to Dallas Business Journal on J.C. Penney Bankruptcy, Future Prospects<p>Bell Nunnally Partner <a href="">Russell W. Mills</a> is quoted in the <i>Dallas Business Journal</i> article &ldquo;What's next for J.C. Penney and Neiman Marcus?&rdquo;</p> <p>Mills noted that Plano-based J.C. Penney had been struggling to connect with consumers for years, a problem greatly exacerbated by the COVID-19 pandemic and that its bankruptcy filing is not a &ldquo;cure-all&rdquo; for its issues.</p> <p>&ldquo;It's easier to get into bankruptcy than it is to get out because now (JCPenney) has to basically prove that it can operate at some level going forward &mdash; operate profitably. It's called feasibility,&rdquo; remarked Mills.</p> <p>Mills added that the future for Penney&rsquo;s depends in large part on resonating with customers as the pandemic eases and growing revenues &ndash; an unknown prospect.</p> <p>&ldquo;You can pare down expenses, right to the bare bones, but there are only so many expenses you can cut out,&rdquo; Mills said. &ldquo;The key is revenue. (Retailers) have to entice their customers to come back.&rdquo;</p> <p>To read the full article, please click <a href="">here</a>.</p>News21 May 2020 00:00:00 -0800 v. Steven Kuper: Trial Strategies of an Acquittal<strong>Event Details:</strong><br /> <br /> Partner Jeff Ansley and Associate Arianna Goodman are presenting &quot;USA v. Steven Kuper: Trial Strategies of an Acquittal&quot; for the Dallas Bar Association.<br /> <br /> <strong>Date/Time:</strong><br /> <br /> May 20, 2020<br /> 12:00 PM<br /> <br /> <strong>Overview:</strong><br /> <br /> After a nearly seven-week health care fraud case in the Northern District of Texas, three defendants were acquitted of all charges, two will be retried and one was convicted. This webinar will review the highlights of the case United States v. Steven Kuper, et al., including how our client, a pharmacist, was acquitted of all charges. This webinar will explain how pre-trial strategy, jury selection, selective cross-examination and confronting bad facts led to Steven Kuper&rsquo;s acquittal.<br /> <br /> For more details and to register, please click <a href=";evAction=showDetail&amp;eid=83004&amp;evSubAction=viewMonth&amp;calmonth=202005">here</a>. <br /> <br />Events20 May 2020 00:00:00 -0800 Effect of COVID-19 on Existing Litigation<strong>Posted: March 18 at 4:20 PM; Updated May 20 at 5:15 PM</strong><br /> <br /> <p>Litigators and litigants across the country will need to be prepared for a changing litigation landscape in light of the novel coronavirus (COVID-19). Most courts have delayed their current trial settings.&nbsp;Courts across the country are also exercising their discretion to modify existing scheduling orders, hearing settings, and other deadlines to reduce the risk of COVID-19 transmission.&nbsp;This client e-alert provides resources on: (1) the various court orders that impact scheduling, hearings, and trials for existing litigation; (2) guidelines on filing a motion for continuance in light of COVID-19; and (3) a step-by-step guide to effectively conduct a videoconference deposition and hearing.</p> <p><b><u>Updated Landscape for Existing Litigation In Light of COVID-19</u></b></p> <p>On April 28, 2020, Texas Governor Greg Abbott issued an executive order<a href="#_ftn1" name="_ftnref1" title=""><span><span><span>[1]</span></span></span></a> relating to the expanded reopening of services.&nbsp;&nbsp;This was a significant move following Texas&rsquo;s First Emergency Order Regarding the COVID-19 State of Disaster issued on March 13, 2020.<a href="#_ftn2" name="_ftnref2" title=""><span><span><span>[2]</span></span></span></a>&nbsp;The most recent executive order ushers a cautious, yet hopeful period for Texans.&nbsp;</p> <p>While Texas may be re-opening in some parts, appellate courts, district courts, criminal courts, civil courts, justice of the peace courts, and other courts have chosen to apply the above order in a variety of degrees, and adopted different standing orders or notices as a result.&nbsp;</p> <ul> <li><b>Northern District of Texas</b> &ndash; Other than one specific case listed in the most recent order, civil and criminal jury trials scheduled to begin through May 31, 2020 will be continued and reset to another date by the presiding judge. Upon motion of defendant in a criminal case, that particular case may be tried at an earlier date.&nbsp;The shift in trial dates does not impact other deadlines, although attorneys are encouraged to contact the presiding judge should they seek to modify any other deadlines. While judges may continue to hold in-person hearings, proceedings, and conferences, counsel has the opportunity to seek relief from those matters by appropriate motions.&nbsp;Grand jury proceedings may resume under conditions directed by the court.<a href="#_ftn3" name="_ftnref3" title=""><span><span><span>[3]</span></span></span></a></li> <li><b>Eastern District of Texas</b> &ndash; All civil and criminal jury trials through May 31, 2020 will be continued and reset to another date by the presiding judge.&nbsp;This continuance does not affect other deadlines.&nbsp;Courts have the discretion to hold bench trials, in person hearings, and scheduling conferences.&nbsp;Telephonic and video conferences are welcome, as deemed appropriate by the individual court.&nbsp;Additionally, the grand jury will meet only once during the month of May.<a href="#_ftn4" name="_ftnref4" title=""><span><span><span>[4]</span></span></span></a>&nbsp;&nbsp;</li> <li><b>Western District of Texas</b> &ndash; On May 8, 2020, the court issued a supplemental order stating that civil and criminal bench and jury trials and all grand jury proceedings scheduled to begin on or before June 30, 2020 are continued to a date to be reset by each presiding judge.&nbsp;This does not affect other deadlines.&nbsp;Judges may continue to hold in-person hearings, but counsel may seek relief from those matters by appropriate motions.<a href="#_ftn5" name="_ftnref5" title=""><span><span><span>[5]</span></span></span></a></li> <li><b>Southern District of Texas</b> &ndash; Jury trials and scheduled sessions of the Grand jury through May 31, 2020 are continued, to be reset by the judge.<a href="#_ftn6" name="_ftnref6" title=""><span><span><span>[6]</span></span></span></a></li> <li><b>U.S. Bankruptcy Court for the Northern District of Texas</b> &ndash; Court hearings will go forward for the month of May 2020 (except for motions to extend or impose the stay, trials in adversary proceedings, and contested matters requiring lengthy hearings).&nbsp;With limited exceptions, the hearings will be by video and telephone. &nbsp;On rare occasions and after motion for a live hearing, the court may grant an in-person live hearing with face masks required.&nbsp;Parties will be permitted to participate by video or telephonically.&nbsp;If party is a witness, must appear on video. For trials in adversary proceedings and contested matters requiring lengthy hearings, parties should contact appropriate courtroom deputy and each judge will handle those on a case-by-case basis.<a href="#_ftn7" name="_ftnref7" title=""><span><span><span>[7]</span></span></span></a>&nbsp;</li> <li><b>Dallas County District Courts, County Courts, and Justice of the Peace Courts</b> &ndash; All jury trials are cancelled through at least June 1, 2020.<a href="#_ftn8" name="_ftnref8" title=""><span><span><span>[8]</span></span></span></a>&nbsp;</li> <li><b>Tarrant County</b> &ndash; All jury trials are cancelled through at least June 1, 2020.<a href="#_ftn9" name="_ftnref9" title=""><span><span><span>[9]</span></span></span></a>&nbsp;</li> <li><b>Collin County Courts</b> &ndash; All jury trials are cancelled through at least June 1, 2020.<a href="#_ftn10" name="_ftnref10" title=""><span><span><span>[10]</span></span></span></a>&nbsp;</li> <li><b>Ellis County District Courts and County Courts at Law</b> &ndash; All civil, criminal, and family jury trials set to begin before May 31, 2020 are postponed.<a href="#_ftn11" name="_ftnref11" title=""><span><span><span>[11]</span></span></span></a>&nbsp;All jury trials are cancelled through at least June 1, 2020.<a href="#_ftn12" name="_ftnref12" title=""><span><span><span>[12]</span></span></span></a>&nbsp;</li> <li><b>Dallas District Court of Appeals</b> &ndash; Oral arguments through May 8, 2020 are suspended.<a href="#_ftn13" name="_ftnref13" title=""><span><span><span>[13]</span></span></span></a></li> <li><b>Fort Worth District Court of Appeals</b> &ndash; According to its website, the court continues to operate and remains open during regular business hours (8:00&ndash;5:00 p.m., Monday-Friday).&nbsp;&nbsp; All parties are expected to continue to comply with applicable laws, rules and deadlines.&rdquo;<a href="#_ftn14" name="_ftnref14" title=""><span><span><span>[14]</span></span></span></a></li> <li><b>U.S. Court of Appeals for the Fifth Circuit</b> &ndash; Cancelled in-person oral arguments scheduled for April 30, 2020. The Court may consider telephonic argument for cases, which the Court will promptly post as audio files on its website.&nbsp;Requirement to submit paper copies of filings is suspended until further notice.<a href="#_ftn15" name="_ftnref15" title=""><span><span><span>[15]</span></span></span></a>&nbsp;Oral arguments resumed on May 4, 2020.</li> <li><b>American Arbitration Association</b> &ndash; No hearings will take place in AAA or ICDR (the International Centre for Dispute Resolution) hearing facilities until at least June 1, 2020. Hearings can proceed in other locations if the involved parties comply with state/federal/city regulations and minimize the risk of transmitting COVID-19.&nbsp;Alternately, the AAA encourages video and teleconferencing if desired.<a href="#_ftn16" name="_ftnref16" title=""><span><span><span>[16]</span></span></span></a></li> <li><b>FINRA Arbitrations</b> &ndash; FINRA administratively postponed all in-person arbitration and mediation proceedings scheduled through July 3, 2020. All case deadlines will continue to apply unless the parties jointly agree otherwise.&nbsp;FINRA will waive postponement fees for certain dates.&nbsp;FINRA Dispute Resolution offers virtual hearing services to parties in all cases by joint agreement or by panel order.<a href="#_ftn17" name="_ftnref17" title=""><span><span><span>[17]</span></span></span></a></li> </ul> <p>A comprehensive list of closures for Texas courts can be found on the Office of Court Administration&rsquo;s website for information on closures or delays reported to the OCA. <a href=""></a>.&nbsp;This site is changing daily and prudent practice calls for checking the website of the individual judge, reviewing any applicable standing orders, and calling the court staff to confirm availability.</p> <p><b><u>Motions for Continuance and Conferencing Procedure</u></b></p> <p>Various special court orders, including the Special Order by the Northern District of Texas, have requested that litigants work together to resolve scheduling disputes, conflicts over deadlines, and to promote the health and safety of the general public.&nbsp;A litigant who is seeking a motion for continuance should consider citing the specific special order or notice that is in effect for a certain court.&nbsp;The litigant should also consider providing specific factual reasons why a motion for continuance is warranted.&nbsp;Getting a continuance may not be a straightforward matter, however.&nbsp;For example, on March 12<sup>th</sup>, Chief Judge Rodney Gilstrap of the Eastern District of Texas denied a joint emergency motion for continuance due to COVID-19 for the case styled <i>Saint Lawrence Communications, LLC v., Inc. and, LLC</i>, Case No. 2:19-cv-00027.&nbsp;The Court was confident the parties would be able to use &ldquo;technological innovations&rdquo; to move the case forward.&nbsp;The Court further cited that it needed &ldquo;specific concerns backed by firm restrictions from a governmental/public health level or actual exposure&rdquo; before granting a continuance for witness depositions. Thus, be wary of using COVID-19 as a blanket excuse. Attorneys are expected to find a way to keep the world turning.</p> <p><b><u>Guidelines for Video Depositions and Videoconference Hearings</u></b></p> <p>Discovery is one of the most essential phases of litigation and arbitration, where the parties learn each others&rsquo; strengths and weaknesses and pin down key witnesses on their allegations.&nbsp;While attorneys, parties to lawsuits, and witnesses may need to avoid being in one room with other people, that does not mean depositions are not possible.&nbsp;As referenced in the Supreme Court of Texas and the Court of Criminal Appeals Emergency Order, all courts must &ldquo;[a]llow or require anyone involved in any hearing, deposition, or other proceeding of any kind &mdash; including but not limited to a party, attorney, witness, or court reporter . . . to participate remotely, such as by teleconferencing, videoconferencing, or other means.&rdquo;</p> <p>Not surprisingly, videoconference depositions require more planning than a traditional in-person deposition.&nbsp;The first step in the process is choosing a court reporting service with experience in video teleconferences. &nbsp;Attorneys should pay close attention to the technological aspects of the services provided, so they will not be surprised during the deposition. &nbsp;For example, some of these systems include real-time transcriptions, some videos may lag, and other systems may allow for only a limited number of participants who are able to see the video and hear the audio. &nbsp;After confirming the court reporting service, the attorney will need to be sure that he or she can properly log in to the applicable system.&nbsp;This will also give the attorney the opportunity to ensure the camera on his or her laptop, computer, or tablet is capable of being used in this process. Ideally, this is all done at least one day beforehand so that there are no disruptions on the morning of the deposition.</p> <p>The attorney will also want to have a reliable speakerphone at his or her desk.&nbsp;There are two reasons for this.&nbsp;First, some of these video conference services suggest you use the speakerphone for audio so it frees up processing resources on your computer, potentially allowing for better video quality.&nbsp;Second, the speakerphone also serves as a back-up in case anyone has technical difficulties or needs to leave the room during the session.&nbsp;</p> <p>There are additional practical considerations when taking or defending a deposition that is being recorded by video. Most importantly, the attorney should always remember that his or her conduct and tone of voice will be recorded for all, including the judge and jury, to hear at a later time.&nbsp;Additionally, if the deposing attorney wants to use a specific document during deposition, the attorney should upload the proposed exhibit to the website ideally a day in advance to ensure the documents are uploaded. Some court reporting video programs allow a deposing party to upload documents such that they will not be visible to the opposing party until the deposing party chooses to present the exhibit to the witness.&nbsp;Exhibits can be uploaded during the deposition, but doing so may take additional time.&nbsp;In any event, an attorney would want to coordinate ahead of time with the court reporter to ensure the attorney understands how to use the program and download the documents.&nbsp;The deposing attorney may also consider sending a binder of exhibits in advance of the deposition as a fail-safe measure.&nbsp;</p> <p>Likewise, the Texas Supreme Court is permitting telephonic hearings and hearings by video for cases pending in state courts.&nbsp;Specifically, the order mandates that Texas courts must &ldquo;[c]onsider as evidence sworn statements made out of court or sworn testimony given remotely, out of court, such as by teleconferencing, videoconferencing, or other means.&rdquo; &nbsp;</p> <p>Regarding federal cases, the Administrative Office of the U.S. Courts sent guidance to federal courts across the nation, urging them to remain flexible and encourage methods to reduce travel by out-of-town lawyers and witnesses.&nbsp;Chief District Judge Lee Rosenthal of the U.S. District Court for the Southern District of Texas has supported this effort, by noting that we all should take advantage of video conference technology or different kinds of ways to present arguments and information, without physical presence, if and when possible.&nbsp;</p> <p>Certain software conferencing programs, such as or, allow participants to engage in videoconferencing, produce exhibits, and also make revisions on documents, such as proposed orders.&nbsp;As with all technology use, it is the litigant&rsquo;s responsibility to be well-versed with the program before the hearing to make sure there are no technical difficulties during the allotted hearing time. &nbsp;Additionally, litigators should coordinate with court staff regarding all use of technology so the presentation is aligned with the Court&rsquo;s preferences. &nbsp;A litigant should also decide if a record is needed for the hearing, and notify the court clerk regarding the need for the record so the court staff can prepare accordingly.</p> <p>Participating in video hearings presents both new challenges and opportunities.&nbsp;Preparation will be increasingly important for attorneys who are not accustomed to participating in hearings remotely.&nbsp;First, the attorney should reach out to court personnel in advance of the hearing to learn about the particular court&rsquo;s technological capabilities and weaknesses to know what is possible.&nbsp;For example, if the attorney is not able to display documents on the screen, it would be prudent to send a notebook to the Court in advance of the hearing.&nbsp;Planning for logistics such as this can only benefit an attorney&rsquo;s presentation, helping the attorney to more effectively represent his or her client.</p> <p>Please note that some courts are more advanced in technological capabilities than others. Some smaller or rural jurisdictions may not be able to upgrade their technology to make videoconferencing possible. An attorney should check with each individual court coordinator as far beforehand as possible to assess the court&rsquo;s capabilities.</p> <p>The next few weeks &mdash; and months &mdash; will force many firms and courthouses to accelerate their adoption of technology.&nbsp;We anticipate that litigators and courthouse staff will go through a learning curve in the near future, and courthouse preferences will likely evolve over time.&nbsp;For better or worse, litigators will need to be nimble and prepared to persuasively represent their clients, whether in person or through a computer screen. <br /> <br /> If you have questions or would like to discuss further, please contact <a href="">Heath Cheek</a>, <a href="">Saba Syed</a> and <a href="">Brent Turman</a>.</p> <div><br clear="all" /> <hr size="1" align="left" width="33%" /> <div id="ftn1"> <p><a href="#_ftnref1" name="_ftn1" title=""><span><span><span>[1]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn2"> <p><a href="#_ftnref2" name="_ftn2" title=""><span><span><span>[2]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn3"> <p><a href="#_ftnref3" name="_ftn3" title=""><span><span><span>[3]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn4"> <p><a href="#_ftnref4" name="_ftn4" title=""><span><span><span>[4]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn5"> <p><a href="#_ftnref5" name="_ftn5" title=""><span><span><span>[5]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn6"> <p><a href="#_ftnref6" name="_ftn6" title=""><span><span><span>[6]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn7"> <p><a href="#_ftnref7" name="_ftn7" title=""><span><span><span>[7]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn8"> <p><a href="#_ftnref8" name="_ftn8" title=""><span><span><span>[8]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn9"> <p><a href="#_ftnref9" name="_ftn9" title=""><span><span><span>[9]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn10"> <p><a href="#_ftnref10" name="_ftn10" title=""><span><span><span>[10]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn11"> <p><a href="#_ftnref11" name="_ftn11" title=""><span><span><span>[11]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn12"> <p><a href="#_ftnref12" name="_ftn12" title=""><span><span><span>[12]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn13"> <p><a href="#_ftnref13" name="_ftn13" title=""><span><span><span>[13]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn14"> <p><a href="#_ftnref14" name="_ftn14" title=""><span><span><span>[14]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn15"> <p><a href="#_ftnref15" name="_ftn15" title=""><span><span><span>[15]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn16"> <p><a href="#_ftnref16" name="_ftn16" title=""><span><span><span>[16]</span></span></span></a> <a href=""></a></p> </div> <div id="ftn17"> <p><a href="#_ftnref17" name="_ftn17" title=""><span><span><span>[17]</span></span></span></a> <a href=""></a></p> </div> </div> <br />Newsletters & Client Alerts20 May 2020 00:00:00 -0800 Loan Forgiveness Application is Now Available<p><strong>Posted: May 19 at 4:15 PM</strong><br /> <br /> On Friday, May 15, the U.S. Small Business Administration (SBA) released the <a href="">Loan Forgiveness Application</a> (the &ldquo;<b><i>Application</i></b>&rdquo;) in connection with the Paycheck Protection Program (PPP). The PPP was established under the CARES Act<a href="#_ftn1" name="_ftnref1" title=""><span><span><span><span>[1]</span></span></span></span></a> to provide eligible small businesses with cash &mdash; in the form of forgivable loans (&ldquo;<b><i>PPP Loans</i></b>&rdquo;) &mdash; to help keep employees on payroll during the pandemic and to assist with other specified expenses, including interest on mortgage loans, rent and utilities. The Application provides much-needed clarification, guidance and flexibility for borrowers on a number of issues of concern. Some of the key provisions and/or changes are described below.</p> <ul> <li><b>Electing an Alternative Payroll Covered Period. </b>The CARES Act provides that a borrower&rsquo;s eligible payroll costs are calculated using the eight-week (56-day) period (the &ldquo;<b><i>Covered Period</i></b>&rdquo;) commencing on the date that such borrower received its PPP Loan proceeds from its lender (the &ldquo;<b><i>PPP Loan Disbursement Date</i></b>&rdquo;). The Application permits a borrower with a biweekly (or more frequent) payroll schedule to calculate its eligible payroll costs using an &ldquo;<b><i>Alternative Payroll Covered Period</i></b>,&rdquo; which begins on the first day of the first pay period following such borrower&rsquo;s PPP Loan Disbursement Date. Notably, however, this change is for administrative convenience only and will not impact the amount of loan forgiveness, as further described below in the subsection for &ldquo;Payroll Costs.&rdquo;</li> <li><b>Payroll Costs: Incurred vs. Paid. </b>Section 1106(b) of the CARES Act indicates that eligible &ldquo;costs incurred <i>and</i> payments made&rdquo; (emphasis added) during the Covered Period will qualify for forgiveness. Such language made it unclear whether such costs had to be &ldquo;incurred,&rdquo; &ldquo;paid&rdquo; or both during the Covered Period. The Application clarifies that payroll costs incurred <b><i>or</i></b> payments made will qualify for forgiveness. Put another way, (i) payments made during the Covered Period; and (ii) payroll costs incurred during, but not paid until after, the Covered Period (provided that such costs are paid on or before the next regular payroll date) will qualify for forgiveness.</li> <li><b>Forgiveness Limited to Principal Only (Maybe).</b> The language of the CARES Act provides that only the principal amount of a PPP loan is forgivable, but the U.S. Treasury Department sowed confusion when it subsequently issued interim final rules providing that both principal and accrued interest were forgivable. The Application provides that forgiveness is limited to principal only.&nbsp;Although it&rsquo;s unclear based on the totality of the guidance to date, it appears from the Application that forgiveness will be limited to principal.</li> <li><b>Priority of Forgiveness Limitations. </b>The potential amount of a PPP loan which may be forgiven is calculated as the sum of a business&rsquo;s payroll costs, mortgage interest payments, rent or lease payments and utility payments (the &ldquo;<b><i>Forgivable Amount</i></b>&rdquo;). However, the Forgivable Amount is subject to four potential limitations/reductions: (a) limitation to the principal amount of the loan; (b) at least 75% of the requested forgiveness amount must consist of payroll costs; (c) potential reduction due to decrease in full-time equivalent employees (the &ldquo;<b><i>FTE Reduction</i></b>&rdquo;); and (d) potential reduction due to decrease in employee salaries or hourly wages by more than 25% (the &ldquo;<b><i>Salary Reduction</i></b>&rdquo;). Previously, the order in which such limitations/reductions would be applied to the Forgivable Amount was unknown. The Application clarifies that the Salary Reduction is applied first, followed by the FTE Reduction (the resulting amount, the &ldquo;<b><i>Modified Forgivable Amount</i></b>&rdquo;). Forgiveness is then determined to be the lesser of: (i) the Modified Forgivable Amount; (ii) the original principal amount of the PPP Loan; and (iii) the quotient obtained by dividing payroll costs by 75%.</li> <li><b>Exceptions to the FTE Reduction. </b>The Application provides several exceptions to the application of the FTE Reduction where (a)(i) the borrower made a good-faith, written offer to rehire an employee which was rejected by such employee; (ii) an employee was fired for cause; (iii) an employee voluntarily resigned; or (iv) voluntarily requested and received a reduction in hours; and (b) the vacated position was not filled by a new employee.</li> <li><b>Eligible Mortgage Interest Payments.</b> The amount of business mortgage interest payments made during the Covered Period includes payments of interest on any business mortgage obligation on real <i>or</i> <i>personal property</i> incurred prior to February 15.</li> <li><b>Additional Scrutiny for PPP Loans in Excess of $2 Million.</b> If the borrower, together with its affiliates (if and to the extent required)<a href="#_ftn2" name="_ftnref2" title=""><span><span><span><span>[2]</span></span></span></span></a>, received PPP loans with an original principal amount in excess of $2 million, the borrower must check a box indicating as such &mdash; reinforcing the notion that PPP loans in excess of $2 million will be subject to additional scrutiny.<a href="#_ftn3" name="_ftnref3" title=""><span><span><span>[3]</span></span></span></a></li> </ul> <p>The above is intended to provide a brief overview of the recently released PPP Loan Forgiveness Application and to highlight some of the changes contained therein with respect to previously issued guidance from the SBA and the Treasury. We expect the SBA and the Treasury to issue further PPP Loan guidance for borrowers <i>and</i> lenders in the near future.<br /> <br /> If you have questions or would like to discuss further, please contact <a href="">Trey DeLoach</a>, <a href="">Nikki Gibson</a>, <a href="">Ed McQueen</a> or <a href="">Ira Perez</a>.</p> <div><br clear="all" /> <hr size="1" align="left" width="33%" /> <div id="ftn1"> <p><a href="#_ftnref1" name="_ftn1" title=""><span><span><span><span>[1]</span></span></span></span></a> The Coronavirus Aid, Relief, and Economic Security Act (the &ldquo;<b><i>CARES Act</i></b>&rdquo;) was enacted March 27, 2020, to &ldquo;provide emergency assistance and health care response for individuals families, and businesses affected by the 2020 coronavirus pandemic.&rdquo; We&rsquo;ve previously discussed PPP loans and the other relief measures under the CARES Act in a series of in-depth articles available <a href=""><span>here</span></a> (under Commercial Finance) in Bell Nunnally&rsquo;s COVID-19 Legal Resources Directory.</p> </div> <div id="ftn2"> <p><a href="#_ftnref2" name="_ftn2" title=""><span><span><span><span>[2]</span></span></span></span></a> Please click <a href=""><span>here</span></a> for our prior discussion of the affiliate rules and business size requirements applicable to PPP loans.</p> </div> <div id="ftn3"> <p><a href="#_ftnref3" name="_ftn3" title=""><span><span><span><span>[3]</span></span></span></span></a> The SBA recently announced that, with respect to the SBA&rsquo;s review of any PPP loan and the borrower&rsquo;s good faith certification regarding the necessity of such loan, a new&nbsp;safe harbor&nbsp;will apply to borrowers with PPP loans having an original principal amount of&nbsp;<i>less than</i> $2 million. Click <a href=""><span>here</span></a> for more information.</p> </div> </div>Newsletters & Client Alerts19 May 2020 00:00:00 -0800 Turman to Present Trial Skills CLE for the District of Columbia Bar Association Litigation Community<strong>Event Details:</strong><br /> <br /> Senior Associate Brent Turman is presenting a trial skills CLE for the District of Columbia Bar Association Litigation Community. <br /> <br /> <strong>Date/Location:</strong><br /> <br /> Tuesday, May 19, 2020<br /> 12:00 PM<br /> <br /> <strong>Overview:</strong> <br /> <br /> This webinar seamlessly weaves trial tips and ethics into the story about an unlikely source of knowledge. Through the story of the rise and fall (and rise again) of a Billboard regular, Turman highlights important lessons litigators can learn and apply to their practices. The lessons include how to properly structure questions during a cross-examination, details attorneys should pay attention to in the courtroom and the different strategies litigators can use when communicating with a jury.<br /> <br /> For more information and to register for the webinar, please click <a href=";webcode=EventInfo&amp;Reg_evt_key=2fc5ff68-16f7-42d7-ade7-9e62f61b3232&amp;RegPath=EventRegFees&amp;FreeEvent=&amp;Event=NEW%20DATE%20-%20WEBCAST:%20What%20Kanye%20Can%20Teach%20Us%20About%20Litigation&amp;FundraisingEvent=&amp;evt_guest_limit=9999&amp;utm_source=Real%20Magnet&amp;utm_medium=email&amp;utm_campaign=154161369">here</a>. <br /> <br />Events19 May 2020 00:00:00 -0800 Check Agreement - a Quick Primer<strong>Event Details:<br /> </strong><br /> Partner Karen Hart is presenting the webinar &quot;Joint Check Agreements - a Quick Primer&quot; for the National Association of Credit Management. <br /> <strong><br /> Date/Time:</strong><br /> <br /> Monday, May 18, 2020<br /> 3:00 PM<br /> <br /> <strong>Overview: </strong><br /> <br /> Join attorney Karen for a short webinar on joint check agreements. She will cover key terms for joint check agreements, where joint check agreements can go awry and how you can minimize risk for your company when entering a joint check agreement. <br /> <br /> For more information and to register, please click <a href="">here</a>. <br /> <br /> To view the PowerPoint from the presentation, please click <a href="/27F299/assets/files/Documents/Joint Check Agreements A Quick Primer NACM.pdf">here</a>. <br type="_moz" />Events18 May 2020 00:00:00 -0800 Hays Quoted on Legaltech News Regarding Potential Risks of COVID-19 Spurred "No-Entry" Policies at Data Centers<p>Partner Jared W. Hays is quoted in the <i>Legaltech News</i> article &ldquo;Access Denied: Data Centers' &lsquo;No-Entry&rsquo; Policies May Benefit Law Firms.&rdquo; The piece explores the impact for law firms of data centers implementing &ldquo;no-entry&rdquo; policies, prohibiting visitors, customers, customers&rsquo; contractors, and non-critical employees and vendors from facilities in light of COVID-19. Hays noted that even prior to the pandemic, most colocation facilities and data centers limited entrance, &ldquo;Even in normal times, there&rsquo;s really mostly restrictive access.&rdquo; He added that data centers, as standard operating procedure, require several levels of approval and security checks and visitor badges and escort visitors to final destinations.</p> <p>Hays cautioned that firms should check a new &ldquo;no-entry&rdquo; policy against their contract and also confirm that is in accordance with local statues regarding restricting access. &ldquo;There could be liability for a provider in these types of restrictions. I think it&rsquo;s important from the provider&rsquo;s perspective that they word their policies carefully and try to limit the amount they are restricting access to what is only necessary.&rdquo; He adds that the newly restrictive policies are not a guard against all risk. While many cyber risk surveillance and mitigation tools are available to data center employees&rsquo; remotely, malfunctions may be possible with fewer employees present. &ldquo;Where I would be concerned [is] when we are having to delay preventive maintenance and delay inspections. If we are not checking, our hardware might have problems down the road. If you put that stuff off too long, the risk of electrical and mechanical failure increases because it&rsquo;s not supposed to operate so long without that maintenance.&rdquo;</p> <p>To read the full article, please click <a href="">here</a>.</p>News18 May 2020 00:00:00 -0800