On Monday, June 22nd, New York City –reopened to Phase Two businesses – including offices (including law firms, real estate and many other professional services).  New York City is the final region in New York State to have entered this phase which comes three months after the closure of all non-essential businesses under the “New York State on Pause.”  This is part of Governor Cuomo’s plan, called “New York Forward,” to re-open non-essential businesses in New York State on a regional and industry-specific basis as each region meets the criteria necessary to protect public health.

Although this is certainly a positive development, reopening offices under the New York Forward program will not be back to business as usual.  In connection with reopening, Phase Two businesses are required to, among other things, adopt industry-specific guidelines put forth by NYS (the “Guidelines”) and to adopt and conspicuously display a written safety plan that is designed to protect employees and visitors, make the physical workspace safer and implement processes that lower risk of infection in the business.  The Guidelines impose certain mandatory requirements, as well as recommended best practices, covering the following areas: screening, physical distancing (social distancing and limiting occupants to no more than 50% of maximum occupancy of a particular area), personal protective equipment (“PPE”) (e.g., masks), hygiene and cleaning, and communication.  In addition, employers must affirm in a written instrument that they have reviewed and understand the Guidelines and will implement them.

Notably, the Guidelines require employers to take steps to reduce interpersonal contact through various methods, such as limiting in-person presence to necessary staff, reducing on-site workforce, and staggering arrival/departure times.  Although the employer is free to choose the method, it is recommended that employees who can work remotely continue to do so at least for the near future.

Additional requirements under the Guidelines that will noticeably impact life in the office include certain screening measures (discussed further below), closing all non-essential common areas (e.g., kitchens, gyms, game rooms) within the office, posting signage for social distancing throughout the office and in tighter spaces where social distancing is not possible (e.g., elevators, bathrooms), supplying of PPE to employees and requiring that PPE be worn around the office, in elevators and other tight spaces, setting up hand hygiene stations, maintaining cleaning logs, undergoing regular sanitization and disinfection of the office, and prohibiting food sharing among employees (e.g., buffet meals), among other things.

To enable building owners and business to screen entrants, Executive Order 202.38 was passed to allow temperature checks prior to individuals gaining entry into the office, and to permit a building owner or employer or building owner to deny admittance to anyone who refuses a temperature check and whose temperature is above that proscribed by the NYS Dept of Health guidelines.  This is in addition to the mandatory health screening assessment under the Guidelines for employees, contractors and other visitors, that permit temperature checks and questionnaires asking about (1) COVID-19 symptoms in past 14 days, (2) positive COVID-19 test in past 14 days, and/or (3) close contact with confirmed or suspected COVID-10 case within past 14 days, with responses being reviewed and documented daily.  On-site screeners should be trained by employer-identified individuals familiar with Federal, State and local protocols, and should wear appropriate PPE, including a face covering at minimum.

In addition to the foregoing, employers must establish a communication plan for employees, visitors and clients with a consistent means to provide updated information, and maintain a continuous log of every person, including workers and visitors, who may have close contact with other individuals at the workplace, such that all individuals may be identified, traced and notified in the event a worker is diagnosed with COVID-19.  Such communication plan should provide for notification of state and local health departments if a worker tests positive for COVID-19 in cooperation with contact tracing efforts, including notifying potential contacts, such as workers, visitors and/or customers who had close contact with the individual while maintaining confidentiality required by state and federal law and regulations.  The communication plan would also cover the more obvious things, such as that employees who are sick should stay home, or should return home if they become ill at work.

As offices reopen, they should also be guided by requirements and recommendations, as applicable, specified by New York City and by the Occupational Safety and Health Administration, Centers for Disease Control and Prevention, and Equal Employment Opportunity Commission.

The above relates exclusively to professional and commercial offices operating in New York City. There are different restrictions and requirements with respect to those other industries permitted to be open at this time (and some businesses are not yet permitted to be open).  The requirements continue to evolve and we will continue to monitor New York City’s staged reopening.

See the following link for Phase Two office industry-specific guidelines: https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/OfficesSummaryGuidelines.pdf

See the following link for Phase Two office industry-specific written safety plan template: https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/NYS_BusinessReopeningSafetyPlanTemplate.pdf

See the following link for NYC Phase Two office guidelines on re-opening: https://www1.nyc.gov/assets/coronavirus/downloads/phase2/offices.pdf

 

 


As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice.  For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

Although a few counties and cities of Maryland continue to impose additional restrictions, Maryland, including Baltimore City, has lifted its stay-at-home order and is proceeding with its three stages of reopening as outlined in Maryland Strong: A Road to Recovery. Nevertheless, Maryland encourages those employees who are able to work at home to continue to do so whenever possible.  When working in a professional office, however, Maryland recommends certain best practices.  For office buildings, Maryland recommends the following:

  • Clean and disinfect the offices per CDC guidelines.
  • Open or remove doors where possible to minimize touch points.
  • Remove high-touch shared items or sanitize between uses (e.g., kitchen appliances)
  • Provide automatic hand sanitizer stations near touch points (e.g., elevators).
  • Install automatic soap dispensers in kitchens and restrooms.
  • Rearrange desks and seats in meeting rooms to allow six feet of distancing.
  • Consider designating and posting one-way foot traffic direction signs in main circulation routes.
  • Mark increments of six feet on floors where lines form.
  • Post signs on walls and place stickers on floors of elevators describing where to stand.
  • Open doors and windows for fresh air.
  • Replace air filters more frequently, using the highest filtration level available.
  • Designate one location for deliveries, disinfecting items and restricting to only assigned employees.
  • Encourage the use of face masks.
  • Communicate these precautions to tenants promptly and electronically.

 

For employers offering professional services, Maryland recommends the following:

  • Implement a daily screening process that includes asking employees health questions recommended by CDC and Maryland Department of Health (e.g., did you lose your sense of smell or taste?).
  • Consider temperature testing employees.
  • Instruct sick employees to follow CDC and MDH guidelines regarding home isolation.
  • Conduct telephone or video conferences.
  • Limit attendees at in-person conferences.
  • Consider alternate work hours (e.g., split or staggered schedules)
  • Stagger lunch hours and use of kitchens.
  • Encourage the use of face masks.
  • Encourage distancing of six feet.
  • Communicate these precautions to employees promptly and electronically.

Currently, Maryland has progressed to the second stage.  Hopefully, the implementation of these recommendations will allow Maryland to not only enter into stage three but also finally graduate to business as usual.

 


As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice.  For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

On March 21, 2020, Governor Murphy issued Executive Order 107 directing that businesses, including commercial and professional offices, must accommodate their workforce, wherever practical, for telework or work-from-home arrangements.  To the extent employees are unable to perform their jobs via work-from-home arrangements, businesses are required to use best efforts to reduce on-site staff to the minimum number necessary to continue essential operations of the business.  Examples of employees that can be physically on-site include information technology maintenance workers, janitorial staff and certain administrative staff.

On May 18, 2020, Governor Murphy announced a three-stage plan for reopening New Jersey businesses.  Since June 15, 2020,  New Jersey has been in Stage 2 of this three-stage plan, whereby commercial and professional offices may be open and operating, but must continue to accommodate their workforce for telework and work-from-home arrangements wherever practical in accordance with Executive Order 107.  Further, commercial and professional offices must continue to use best efforts to reduce in-office staff to the minimum number needed to continue essential operations. https://covid19.nj.gov/faqs/nj-information/general-public/what-businesses-are-open-what-rules-or-safety-guidelines-must-they-follow#direct-link  As offices reopen, they are required to be compliant with Federal, State and local safeguards for its employees, visitors and operations, and should be guided by requirements and recommendations, as applicable, specified by New Jersey Executive Orders, and by the New Jersey of Office of Emergency Management, Occupational Safety and Health Administration, Centers for Disease Control and Prevention, and Equal Employment Opportunity Commission.

Owners of commercial buildings that house businesses permitted to maintain in-person operations pursuant to Executive Order 107, including commercial and professional offices, are required to implement the following minimum cleaning protocols:

  • Conduct routine disinfecting of high-touch areas in accordance with CDC guidelines, including after a known or potential exposure to the coronavirus has occurred;
  • Maintain cleaning procedures in all other areas of the facility; and
  • Ensure there are sufficient personnel to effectively conduct the necessary cleaning and disinfecting of the facility in a manner that protects the safety of workers and visitors.

It is not clear when New Jersey will enter Stage 3 of its reopening plan.   The above relate exclusively to professional and commercial offices operating in New Jersey. There are different restrictions and requirements with respect to those other industries permitted to be open at this time.

The requirements continue to evolve and we will continue to monitor New Jersey’s staged reopening, and provide updated guidance as it becomes available.

 


As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice.  For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

On Wednesday, June 17, 2020 New York Governor Andrew Cuomo announced that New York City, the Mid-Hudson Region, and Long Island are all expected to move forward an additional level under the State’s reopening plan within the next week. Currently, New York City is in Phase One, and the Mid-Hudson and Long Island are in Phase Two.

Per the Governor, New York City will advance to Phase Two on Monday, June 22, 2020. So far, dates the Governor has publicly stated for advancing any region have held true, but Mayor Bill de Blasio has been more cautious on this point, believing that the City would not meet the criteria for Phase Two until July 1 at the earliest. Under Phase Two, the following industries may reopen: (1) professional services and offices ; (2) in-store retail ; (3) retail rental, repair, and cleaning; (4) real estate services; (5) vehicle sales, rentals, and leasing ; (6) hair salons and barbershops; (7) commercial building management; and (8) outdoor and take-out food services.

Mid-Hudson is expected to advance to Phase Three on Tuesday, June 23, 2020, with Long Island to follow on June 24, 2020. Under Phase Three, the following businesses may reopen: (1) personal care services, such as tattoo parlors, massage therapy, spas, tanning, and waxing; and (2) indoor food services that meet the proper distancing guidelines.

 


As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice.  For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

The Federal Reserve recently expanded its Main Street Lending Program (the “Program”) to three separate loan facilities:  the Main Street New Loan Facility, the Main Street Priority Loan Facility and the Main Street Expanded Loan Facility (each, a “MSLP Facility” and collectively, the “MSLP Facilities”).  The MSLP Facilities are aimed at providing up to $600 billion of additional liquidity to eligible mid-sized business enterprises. Unless extended, the Program is set to expire on September 30, 2020.

The following is a high-level summary of certain terms relating to the Program and each MSLP Facility as described in the Frequently Asked Questions (“FAQs”) issued by the Federal Reserve and Department of Treasury in connection with the Program.  The FAQs are applicable to any eligible secured or unsecured term loan originated after April 24, 2020.

  1. Eligible Borrower. To be eligible under a MSLP Facility, a business must meet the following criteria:
    • The business must be in existence before March 13, 2020.
    • The business must not be in an “Ineligible Business” as described in the Small Business Association’s regulations concerning PPP loans.
    • The business must have 15,000 or fewer employees, or have 2019 annual revenues of $5 billion or less.
    • The business must be a U.S. business.
    • The business can only participate in one MSLP Facility, but may receive more than one loan under the same facility so long as the amount of all loans under such facility does not exceed the maximum loan amount.
    • The business must not have received specific support pursuant to the CARES Act.
    • The business must be able to make all of the required certifications.
  2. Loan Amount. Pursuant to the term sheets issued for each MSLP Facility, the minimum and maximum loan amount varies by MSLP Facility as follows:
    • Main Street New Loan Facility:
      • Minimum Loan Amount: $250,000
      • Maximum Loan Amount: The lesser of (i) $35 million, or (ii) an amount that, when aggregated with an eligible borrower’s existing outstanding and undrawn available debt, does not exceed 4 times such eligible borrower’s adjusted EBITDA for fiscal year 2019.
    • Main Street Priority Loan Facility:
      • Minimum Loan Amount: $250,000
      • Maximum Loan Amount: The lesser of (i) $50 million, or (ii) an amount that, when aggregated with an eligible borrower’s existing outstanding and undrawn available debt, does not exceed 6 times such eligible borrower’s adjusted EBITDA for fiscal year 2019.
    • Main Street Expanded Loan Facility:
      • Minimum Loan Amount: $10,000,000
      • Maximum Loan Amount: The lesser of (i) $300 million, or (ii) an amount that, when aggregated with an eligible borrower’s existing outstanding and undrawn available debt, does not exceed 6 times such eligible borrower’s adjusted EBITDA for fiscal year 2019.
  1. PPP Loan. A business that received a PPP loan remains eligible to receive a loan under a MSLP Facility.
  2. Loan Term. With respect to each MSLP Facility, each eligible loan will have a maturity date of 5 years. This was increased from 4 years as originally proposed.
  3. Interest Rate. A loan under any MSLP Facility shall have an interest rate of Libor (1 month or 3 month) plus 300 basis points.
  4. Repayment Deferral. Principal payments due with respect to each MSLP Facility may be deferred for two years, and interest payments deferred for one year. Commencing in year three of the loan term, payments of principal and accrued interest shall be due and payable as follows: 15% at the end of year 3, 15% at the end of year four and a balloon payment of 70% upon maturity. Any loan under a MSLP Facility is full recourse to the applicable borrower and is not forgivable.
  5. Collateral/Priority.
    • A loan under any of the MSFL Facilities may be secured or unsecured. However, if the underlying loan is secured, a loan under the Main Street Expanded Loan Facility must also be secured.
    • A loan under the Main Street New Loan Facility may not be contractually subordinated in terms of priority to the borrower’s other loans or debt instruments (which means that it may not be junior in priority in bankruptcy). Under both the Main Street Priority Loan Facility and the Main Street Expanded Loan Facility the loan must be senior or pari passu with, in terms of priority and security, the borrower’s other loans or debt instruments, other than mortgage debt.
  6. Reserve Bank Participation. With respect to all MSLP Facilities, the Federal Reserve Bank of Boston (as the designated Reserve Bank), through a single common special purpose vehicle, will purchase 95% participation interests in eligible loans from eligible lenders. Eligible lenders will retain 5% of the risk associated with any new loans or upsize of existing facilities made to eligible businesses..
  7. Required Certifications. Eligible borrowers are required to make the following certifications and covenants in connection with any MSLP Facility:
    • Eligible borrowers must refrain from repaying the principal balance of, or any interest accrued on, any existing indebtedness until the Program loan is repaid in full, unless such principal or interest payment is mandatory and due (i.e., no voluntary prepayments). The foregoing does not prevent an eligible borrower from refinancing existing debt owed by such borrower to a non-Program lender upon origination of any eligible MSLP Facility.
    • Eligible borrowers covenant not to seek to cancel or otherwise reduce any committed line of credit advanced by a Program lender or otherwise.
    • Each eligible borrower must certify that it has a reasonable basis to believe that, as of the loan origination date and after giving effect to the same, that such borrower has the ability to meet its financial obligations for at least 90 days therefrom, and does not expect to file for bankruptcy during such time period.
    • Each eligible borrower covenants that it will comply with all compensation, stock repurchase and capital distribution restrictions that apply to direct loan programs under the CARES Act, provided that an S corporation or other pass-through entity is permitted to make distributions to the extent reasonably required to cover its owner’s tax obligations in respect of such entity’s earnings.
    • Each eligible borrower must certify that it is eligible to participate in the applicable MSLP Facility, including in light of the conflicts of interest prohibitions contained in the CARES Act.
    • Each eligible borrower covenants and agrees to use commercially reasonable efforts to maintain its payroll levels and retain its employees during the term of the eligible loan.

In addition to the foregoing certifications, each eligible borrower is also required to demonstrate that it is unable to secure adequate credit accommodations from other banking intuitions outside of the Program. Per the FAQs, an acceptable basis for such certification may be that the amount, price or terms of other credit accommodations available to borrower are inadequate for such borrower’s needs during the current unusual and exigent circumstances.

In connection with the above, the Federal Reserve has released a form of borrower certifications and covenants for each MSLP Facility, each of which are linked here: Main Street New Loan Facility, Main Street Priority Loan Facility and Main Street Expanded Loan Facility.

  1. Documentation. Required forms and agreements can be found on the Reserve Bank’s website, which includes a Program loan participation agreement, form of borrower and lender certifications, servicing agreements and related documentation. While the Federal Reserve is not providing form loan documents for use in connection with the MSLP Facilities, all loan documents must include the terms and conditions detailed in the loan document checklist attached as Appendix A to the FAQs.

We are continuing to monitor as additional guidance is released by the Federal Reserve and/or the Department of Treasury, and will provide new Alerts as appropriate.  Our attorneys are available to answer any questions with respect to the foregoing.

 


As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice.  For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.