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COVID-19

New Jersey Issues Outpatient Guidance For Healthcare Professionals During the COVID-19 Pandemic

By Richard A. West

New Jersey Attorney General Gurbir S. Grewal and Department of Health Commissioner Judith M. Persichilli have announced practice guidance for outpatient healthcare professionals statewide during the COVID-19 outbreak.

Doctors, nurses, physician assistants, respiratory care therapists and others are advised to follow best practices set by the Centers for Disease Control and Prevention and the Department of Health when treating patients for COVID-19-related concerns or symptoms. Additional state guidance was developed by the Communicable Disease Service within the Department of Health and the Division of Consumer Affairs within the Department of Law & Public Safety.

Here are some key recommendations:

  • To protect all patients and staff, use telephone screenings prior to office visits to prepare for seeing potential COVID-19 patients
  • Wear appropriate personal protective equipment (PPE) when evaluating symptomatic patients in person
  • Utilize telemedicine as an alternative if unprepared (PPE unavailable in office) to see potential COVID-19-positive patients
  • Avoid recommending referrals or testing for non-symptomatic or low adverse effect-risk patients so as not overwhelm the healthcare system and conserve resources for those most in need of urgent care
  • Testing availability is limited; priority is reserved for symptomatic patients with comorbidities and risk factors
  • When obtaining specimens, take all recommended infection control precautions
  • Symptomatic patients should be initially evaluated via telephone screening focusing on risk factors (recent areas traveled, exposure to COVID-19-positive person, older than 65 years, underlying conditions)
  • Medically stable symptomatic patients can be advised to stay home and self-isolate for a minimum of 7 days after onset of cough and for 72 hours after resolution of fever
  • Self-isolation means isolating from others within the home in addition to not leaving the home
  • Patients that are symptomatic and not medically stable can be evaluated in office if proper PPE is available for all staff performing hands on services – mask for patient and gowns, gloves, eye/face protection (goggles or face shield) and N95 respirators for staff (surgical masks may be substituted only when performing non-aerosolizing procedures — swabbing for a COVID-19 test is non-aerosolizing)
  • If PPE is unavailable in the outpatient office setting, refer medically unstable patients in risk categories to emergency departments of other facilities, but alert the facility in advance regarding patient risk factors and physical condition
  • Routine outpatient practices unrelated to COVID-19 can be continued during the outbreak provided procedures are in place to minimize risk of transmission from asymptomatic persons within the facility such as disinfecting door handles, chairs and restrooms, removing magazines, toys and other objects patients touch while waiting and avoiding long stays in the waiting/reception area
  • Finally, postpone elective procedures and surgeries for non-life threatening conditions

Additional information may be obtained at https://www.nj.gov/health/cd/topics/covid2019_healthcare.shtml

For further guidance about protections for licensed health care professionals in New Jersey during the COVID-19 crisis, please contact Brown Moskowitz & Kallen partner Richard A. West at (973) 376-0909 ext. 1126 or mobile: (973) 229-7928.

This article is for informational purposes only and is not intended to constitute, and does not constitute, legal advice.

Sticky
Apr 03, 2020
0

COVID-19 Insurance Questions and Claims Guidance

By Marc McCabe, Vice President, Alliant Insurance Services

As an insurance professional for more than 35 years and who has witnessed countless regional wars, the Dot-Com Bubble Burst, the 9/11 Terrorist Attacks, the 2008 Financial Crisis and Hurricane Sandy, no one could have foreseen the unprecedented coronavirus pandemic and its global impact on business and industry.

For the past two weeks, I have had countless discussions with my business clients about their continuing operations, lost business deals resulting in lost revenues, the potential impact on claims recovery and managing the well-being of their employees. Clearly, the economic impacts of COVID-19 will test their go-forward operations over the long-term, but closer to my world the questions have been, how their policies will provide indemnification relief, if any. Rather than addressing every possible insurance coverage scenario, let’s explore at a high level my two most talked about conversations — business interruption and employee safety in the workplace.

Firstly, what is happening with the business interruption coverage and how is the insurance industry addressing what is covered or what is the likelihood of recovery with respect to such reported claims? My expectation, as outlined below, is that few damages directly incurred are likely covered under the typical property/business interruption policy…at a macro level. The concept of Business Interruption (BI) under both the Property policies is to protect your insureds against the loss of income following a claims event and after the policy deductible/waiting period has been satisfied. BI is generally defined as the “net income (not loss of revenue)” that would have been earned, “continuing normal operating expenses” and including payroll for key personnel. Typically, for BI coverage to trigger insurance company reimbursement, there must be a suspension of operations and the suspension must be caused by a direct physical loss of or damage to property at an insured’s premises. Regarding Civil Authority (i.e., a government-mandated shutdown) coverage, the Property/BI policy generally has three provisions that all need to be satisfied:

  1. Access to the insured’s business must be denied by the order of civil authorities
  2. The denial of access must be caused by damage or destruction of property
  3. The direct property damage must be from an insured peril (this is where the pandemic exclusion issue arises)

The bottom line is that many businesses across the U.S. have now been adversely affected by Civil Authority actions taken by various governmental entities. The insurance companies underwrite these insurance policies but choose carefully what “Acts of God” to cover or exclude from the policy contract. As such, many of these exclusions apply to the actual or suspected presence or threat of any virus, organism or like substance that is capable of inducing disease, illness, physical distress or death, whether infectious or otherwise, including but not limited to any epidemic, pandemic, influenza, plague, SARS or Avian Flu.

As negative as this may read, none of us know how the insurers are going to respond to any of the COVID-19 claims, albeit, as I noted in the pandemic exclusion above.  As such, it is our recommendation that your finance teams begin collecting records of expenses and losses of revenue/net income. Tracking these expenses and losses in real time is far easier than doing so after the fact and will aid in properly assessing the magnitude and viability of a potential business interruption claim. Other reasons to pursue this strategy involve government and lobbying groups now focused on the prospect of a relief package similar in scope to the 9/11 Victims Compensation Fund. It is quite premature to consider the potential horse trading that could happen, but it remains prudent, at a minimum, to track your records relevant to lost revenue, continuing expenses and maintaining key payroll expenses.

The second issue to be explored includes business exposures due to an employee testing positive for COVID-19 and the potential impact such an event has on the Workers Compensation and Employers Liability policy:

If an employee contracts COVID-19 arising out of or in the course of employment, then the workers’ compensation and employer’s liability coverages respond with coverage for medical costs and lost wages in accordance with state statutory requirements. That said, similar to the business interruption exposure, viral diseases typically are not presumptively considered as arising out of or contracted in the course of employment, and it would be the employee’s burden to establish the causal connection between infection and employment by a preponderance of the evidence.

I have been asked by several clients “If my employee is infected with the COVID-19 virus, will this trigger coverage under the WC policy?” Again, depending on the state of jurisdiction in question, it is difficult to expect compensability unless you’re a medical professional. The employee must show that his employment put him at a higher risk than the general public, and in most cases, expectation of coverage will be arbitrated by the insurance company.

Ask your insurance broker or agent to assist with preparing the claims notices to the insurer within the reporting period guidelines written within each policy. The insurers will review all claims submitted and will issue a coverage position. At such time, you can determine appropriate next steps.


BMK invites articles that may be of interest to our clients, colleagues, and friends during these trying times. BMK is not affiliated with Aliant Insurance Services and it does not endorse the content or views expressed by Alliant or by Mr. McCabe. Should you have questions or comments concerning the article, we suggest that you contact Mr. McCabe directly on his office telephone, (212) 504-1807 or his mobile telephone, (908) 347-4558, or via email: marc.mccabe@alliant.com

The article is not and cannot be construed as legal advice. 

The views expressed in this article were prepared by Marc McCabe in his personal capacity and are for general information purposes only. The views expressed in the article are the author’s own and do not reflect the views of Alliant Insurance Services.

Sticky
Apr 03, 2020
0

NJ EDA Opens Small Business Emergency Assistance Grant Program on April 3, 2020

COVID-19: NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (NJEDA) WILL OPEN APPLICATIONS FOR ITS SMALL BUSINESS EMERGENCY ASSISTANCE GRANT PROGRAM (EMERGENCY GRANT PROGRAM) ON APRIL 3, 2020

FIRST COME, FIRST SERVED: APPLICATIONS CLOSE APRIL 10, 2020

LIMITED TO NJ SMALL BUSINESSES WITH 1 – 10 FULL TIME EQUIVALENT EMPLOYEES (FTEEs)

Applications for the NJEDA Emergency Grant Program will open the morning of April 3, 2020, at 9:00 a.m. and close April 10, 2020, at 9 a.m.

To see whether your business may qualify, you may use the NJEDA’s Eligibility Wizard available at: https://assistance.business.nj.gov/

A copy of the application to assist you with preparing your submission is available now at: https://www.njeda.com/pdfs/NJEDA_COVID-19_Economic-Response-Package-Initial-W

The Emergency Grant Program will provide up to $5,000 to NJ small businesses that have between 1–10 FTEEs. Grant values are calculated at $1,000 per FTEE reported on business’ WR-30 filed with the New Jersey Department of Labor and Workforce Development. The grant may only be used for payroll and working capital; it cannot be used for any capital expenses.

The eligible business must operate within the following industries as defined by the SME’s two-digit North American Industry Classification (“NAICS”) code: Retail; Accommodation & food services; Arts, entertainment & recreation; and Other services (restricted to businesses with 3-digit NAICS of 811 and 812). Non-profits entities with the following designations will also be permitted to receive grant funding: 501(c)(3), 501(c)(4), and 501(c)(7).

Also, the CEO (or equivalent officer) of the business must certify that the business will make a best effort not to furlough or lay off any individuals from the time of application through six months after the end of the declared state of emergency (businesses that have already furloughed or laid off workers must make a best-effort pledge to re-hire those workers as soon as possible) – any material breach of its best efforts certification may result in the NJEDA seeking repayment of the grant.

The total available funding is up to $5 million of which $3 million will be set aside for NJ small businesses with 5 or fewer FTEEs.

Because funding is limited and applications are processed on a first come, first served basis, if you think your business qualifies, investigate and prepare prior to April 3, so that you can submit your application on April 3.


If you would like more guidance, please contact your Brown Moskowitz & Kallen, P.C. attorney at (973) 376-0909 via the office extensions below or the mobile telephone numbers provided.

Stuart Brown
Office Extension: 1118
Mobile: (908) 770-0166

Kenneth Moskowitz
Office Extension: 1112
Mobile: (908) 770-0160

Norman Kallen
Office Extension: 1114
Mobile: (908) 770-0165

Steven Rowland
Office Extension: 1124
Mobile: (973) 879-0544

Keith Marlowe
Office Extension: 1120
Mobile: (973) 568-7559

Richard West
Office Extension: 1126
Mobile: (973) 229-7928

Frederic Tudor
Office Extension: 1122
Mobile: (973) 476-8139

Michael Greenberg
Office Extension: 1119
Mobile: (917) 716-9302

Kristina Brown
Office Extension: 1116
Mobile: (908) 239-7625

Michele-Lee Shapiro
Office Extension: 1130
Mobile: (201) 221-6814

Emilio Lamanna
Office Extension: 1129
Mobile: (516) 554-2460

This article is for informational purposes only and is not intended to constitute, and does not constitute, legal advice.

Sticky
Apr 02, 2020
0

Lending Options for Small and Mid-Businesses During COVID-19

At BMK, we are keenly aware that many of our small- and middle-market business clients are experiencing cash shortfalls and need an urgent infusion of capital to weather the COVID-19 crisis. While a major federal relief bill was just passed by the Senate and House, accessing funding through government channels may not be sufficient nor is it an expedient solution.

From the start of this crisis, BMK pledged to call upon the whole of our resources and alliances to offer pivotal and practical assistance to keep your business stable and positioned for recovery.  For this reason, we are presenting Beechwood Capital Advisors’ Lender Access Program which potentially streamlines the process for obtaining funding to meet payroll, supply chain, rent and related expenses that do not decline despite a sudden sharp decrease in revenue.

The Beechwood Capital Advisors Lender Access Program may be right for your business if:

  • You need immediate access to a wide network of bank and non-bank alternative lenders
  • You are seeking a no risk, no cost introduction to asset-based, factor, private, high yield or unsecured lenders and commercial banks
  • You have collateral such as receivables, inventory, real estate and personal assets
  • You want a DIP financing option
  • You lack traditional collateral but maintain a strong balance sheet with unlocked “value”
  • You need a minimum loan of $1MM

Beechwood Capital makes sourcing funding easy:

  • Engages in a brief introductory conversation with you
  • Prepares a one-page company summary at no cost
  • Presents the summary to 25+ lenders per applicant
  • Fields inquiries from interested sources of capital and presents to applicant
  • Applicant makes sole decision whether or not to proceed
  • If applicant proceeds, enters into an agreement with Beechwood providing for a modest monthly retainer to assist applicant with the lending process and close the loan. Also provides for a success fee to Beechwood at closing.

The Beechwood Capital Advisors Borrower Intake Form is attached here: https://bmk-law.com/beechwood-capital-advisors-borrower-intake-form. If you are interested in exploring Beechwood Capital Advisors’ lending services, or would like to have an informal conversation with them about your financial condition and potential solutions, contact Scott Rothman at (973) 985-9533, Dick Conroy at (732) 770-5036 or Mark Furman at (973) 650-3994.


BMK invites articles that may be of interest to our clients, colleagues, and friends during these trying times. BMK is not affiliated with Beechwood Capital Advisors and it does not endorse the content or views expressed by Beechwood Capital Advisors. Should you have questions or comments concerning the article, we suggest that you contact the Beechwood Capital team directly.

Sticky
Apr 04, 2020
0

Covid-19: CARES Act Provides Assistance for Individuals

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides aid to independent contractors and self-employed individuals, in addition to providing aid to businesses.

  1. The CARES Act temporarily expands unemployment insurance to cover individuals who are not traditionally covered, including the self-employed, gig-workers, independent contractors and workers with an irregular work history. It also expands the list of allowable criteria for claiming unemployment compensation to include many reasons related to the COVID-19 public health emergency. Contact the unemployment office in the state where you worked to determine your eligibility for state unemployment. Under the CARES Act:
    • Individuals may be entitled to receive up to $600/week in addition to what is available under state unemployment benefits; and
    • Individuals may be entitled to up to 39 weeks of payments.
  2. Refundable tax credits are available for independent contractors who would have qualified for coronavirus-related paid leave if they were employees. The IRS will be posting information soon on these credits on its website (www.irs.gov), including information on how to claim these credits.
  3. Individuals who operate a sole proprietorship or work as an independent contractor and eligible self-employed individuals may qualify for a paycheck protection program (PPP) loan. Regulations and guidance about PPP loans for individuals will be issued by the Small Business Administration and Treasury and should be released in the upcoming two weeks.

If you are unsure about whether you are eligible for CARES Act assistance, do not hesitate to reach out to BMK for advice.

Contact your Brown Moskowitz & Kallen, P.C. attorney at (973) 376-0909 via the office extensions below or the mobile telephone numbers provided.

Stuart Brown
Office Extension: 1118
Mobile: (908) 770-0166

Kenneth Moskowitz
Office Extension: 1112
Mobile: (908) 770-0160

Norman Kallen
Office Extension: 1114
Mobile: (908) 770-0165

Steven Rowland
Office Extension: 1124
Mobile: (973) 879-0544

Keith Marlowe
Office Extension: 1120
Mobile: (973) 568-7559

Richard West
Office Extension: 1126
Mobile: (973) 229-7928

Frederic Tudor
Office Extension: 1122
Mobile: (973) 476-8139

Michael Greenberg
Office Extension: 1119
Mobile: (917) 716-9302

Kristina Brown
Office Extension: 1116
Mobile: (908) 239-7625

Michele-Lee Shapiro
Office Extension: 1130
Mobile: (201) 221-6814

Emilio Lamanna
Office Extension: 1129
Mobile: (516) 554-2460

This article is for informational purposes only and is not intended to constitute, and does not constitute, legal advice.

Sticky
Apr 02, 2020
0

COVID-19: Paycheck Protection Program (PPP) Loan Application Now Available; Initial Application Dates Under the CARES Act

The Paycheck Protection Program (the “PPP”) is one of the loan programs administered by the Small Business Administration (the “SBA”) that will be available to small businesses as a result of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”).

PPP loans will be made by participating commercial banks between February 15, 2020 and June 30, 2020, subject to certain eligibility requirements, and will be 100% guaranteed by the SBA. Most employers with fewer than 500 employees who were in operation on February 15, 2020 will be eligible and can use the loan proceeds to help pay operational expenses like payroll, rent, health benefits, insurance premiums, utilities and other costs . Borrowers can apply for forgiveness of all or a portion of a PPP loan, subject to limitations generally tied to maintaining employees and contractors and compliance with the CARES Act.

The Treasury Department has just released a PPP Loan Application – https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf

and a related Information Sheet for borrowers – https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf

Starting April 3, 2020, borrowers that are small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.

Starting April 10, 2020, borrowers that are independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.

In addition to the Loan Application, Borrowers will need to submit payroll documentation. While the exact documentation required is not yet clear, it appears that borrowers should collect the following:

  • Last 12 months of payroll reports beginning with last payroll date and going back 12 months. Include:
    • gross wages
    • paid time off
    • vacation pay
    • family medical leave pay
    • state and local taxes assessed on each employee’s compensation
  • 1099’s for 2019 for independent contractors that would otherwise be an employee. Do NOT include 1099’s for services.
  • Documentation showing total of all health insurance premiums paid under a group health plan.
  • Documentation showing the sum of all retirement plan funding (such as 401K plans, Simple IRA, SEP IRAs) paid by the borrower (not funding paid by employees and deducted from their paychecks).

Since the CARES Act only authorizes the SBA to guarantee up to a certain maximum amount of loans, once that monetary threshold is reached, no further loans could be guaranteed without further Congressional action. As a result, borrowers should consider filing their application as soon as they can after the applicable filing date.
Also, since all or a portion of a PPP loan may qualify for forgiveness based on payroll costs incurred, and mortgage interest payments, rent payments and utility payments made during the covered period ( February 15, 2020 through June 30, 2020), at the end of the covered period Borrowers should be ready to submit to their lender:

  • Documentation verifying FTEE on payroll and their pay rates;
  • Documentation on covered costs/payments (e.g., documents verifying mortgage, rent, and utility payments);
  • Certification from a business representative that the documentation is true and correct and that forgiveness amounts requested were used to retain employees and make other forgiveness-eligible payments; and
  • Any other documentation the SBA Administrator and the lender may require.

If you would like more guidance, please contact your Brown Moskowitz & Kallen, P.C. attorney at (973) 376-0909 via the office extensions below or the mobile telephone numbers provided.

Stuart Brown
Office Extension: 1118
Mobile: (908) 770-0166

Kenneth Moskowitz
Office Extension: 1112
Mobile: (908) 770-0160

Norman Kallen
Office Extension: 1114
Mobile: (908) 770-0165

Steven Rowland
Office Extension: 1124
Mobile: (973) 879-0544

Keith Marlowe
Office Extension: 1120
Mobile: (973) 568-7559

Richard West
Office Extension: 1126
Mobile: (973) 229-7928

Frederic Tudor
Office Extension: 1122
Mobile: (973) 476-8139

Michael Greenberg
Office Extension: 1119
Mobile: (917) 716-9302

Kristina Brown
Office Extension: 1116
Mobile: (908) 239-7625

Michele-Lee Shapiro
Office Extension: 1130
Mobile: (201) 221-6814

Emilio Lamanna
Office Extension: 1129
Mobile: (516) 554-2460

This article is for informational purposes only and is not intended to constitute, and does not constitute, legal advice.

Sticky
Apr 02, 2020
0

COVID-19: SBA Offers Economic Injury Disaster (EIDL) Grants To EIDL Applicants

In connection with the SBA’s EIDL Program, a borrower applying for an EIDL loan can request an advance on the loan of up to $10,000 to be used for authorized costs (such as paid sick leave, payroll, rent and increased supply chain costs). The SBA is required to distribute the advance proceeds within three days of receipt of the request which would be submitted by a borrower in connection with and upon completion of its EIDL loan application, including a certification that the borrower is eligible to apply for an EIDL. It is currently unclear how the SBA will determine how much of the $10,000 maximum amount will be provided to an applicant.

The advance of up to $10,000 is considered by the SBA to be a grant. In other words, a borrower will not be required to repay the grant, EVEN IF the borrower’s application for an EIDL loan is denied. However, the amount of the advance must be deducted from any loan forgiveness amounts if the applicant later receives a Paycheck Protection Program Loan.

The SBA’s on-line application portal can be accessed at https://covid19relief.sba.gov/#/

If you would like more guidance, please contact your Brown Moskowitz & Kallen, P.C. attorney at (973) 376-0909 via the office extensions below or the mobile telephone numbers provided.

Stuart Brown
Office Extension: 1118
Mobile: (908) 770-0166

Kenneth Moskowitz
Office Extension: 1112
Mobile: (908) 770-0160

Norman Kallen
Office Extension: 1114
Mobile: (908) 770-0165

Steven Rowland
Office Extension: 1124
Mobile: (973) 879-0544

Keith Marlowe
Office Extension: 1120
Mobile: (973) 568-7559

Richard West
Office Extension: 1126
Mobile: (973) 229-7928

Frederic Tudor
Office Extension: 1122
Mobile: (973) 476-8139

Michael Greenberg
Office Extension: 1119
Mobile: (917) 716-9302

Kristina Brown
Office Extension: 1116
Mobile: (908) 239-7625

Michele-Lee Shapiro
Office Extension: 1130
Mobile: (201) 221-6814

Emilio Lamanna
Office Extension: 1129
Mobile: (516) 554-2460

This article is for informational purposes only and is not intended to constitute, and does not constitute, legal advice.

Sticky
Apr 01, 2020
0

Commercial Landlord Response to Covid-19

Several of our landlord clients have been approached by tenants (retail and office) seeking rent relief in various forms due to the COVID-19 crisis. The requests have come from a broad range of tenants — from small business owners to large corporations. Some tenants have requested a deferral of rent payments because the current business disruption has negatively affected their cash receipts, while others have been a bit more brazen and have asked for a complete rent abatement for three or four months.

Here are a few points for the landlord to consider:

  1. Pursuant to most leases, the current situation would not provide any justification for the tenant to defer or abate rent. While a force majeure provision may protect a tenant from being in default as a result of “going dark” or failing to perform some other obligations under the lease, generally it would not absolve a tenant from paying the rent in a timely manner.
  2. Landlords may suggest that tenants first look to see if they can get assistance through the federal CARES Act. There are also new programs through the SBA to help small businesses cover expenses, inclusive of rent.
  3. In addressing a tenant’s request, the terms of the lease as well as the terms of the landlord’s loan documents must be considered. In most instances, the loan documents have provisions that prohibit the landlord, or at least affect its ability, to unilaterally modify the terms of the lease without the approval of the lender. This provision would restrict the landlord from immediate agreement to deferrals or abatements of rent payments. In this case, it would be appropriate for a landlord to inform its tenants that it cannot agree to any modifications without the approval of its lender.
  4. To the extent a landlord would like to provide some relief to a tenant (and provided doing so does not violate its loan documents), the following approaches may be considered:
    • A portion of the rent can be deferred and then repaid over a relatively few months.
    • To the extent that a tenant is legitimately in dire need of relief and the landlord wants to retain the tenant, the lease could be amended to provide some benefit to the landlord to compensate for the accommodation. Accommodations may take one or more of the following forms:
      • The deferred rent payments are spread over the balance of the lease.
      • The term of the lease is extended.
      • The tenant agrees to exercise an extension option in the lease. This may raise the tricky question of determining “fair market rent” at a time in which the landlord may not want to make such determination.
      • The security deposit can be applied to the rent, with an agreement that the security deposit will later be restored.
    • A modification of an existing guaranty or requiring a guaranty.
    • In the case of a retail lease, introduction or modification of a percentage rent clause whereby a portion of the rent is determined by the revenue generated by the business.
  5. A landlord can advise the tenant that it is incurring additional costs to ensure the safety of tenants such as increased maintenance, disinfecting public areas, providing hand sanitizer, etc.
  6. Landlords also need to consider the cost to replace a tenant who previously paid its rent and complied with the terms of its lease.

In this unprecedented moment, landlords need to think both logically and creatively in order to resolve the challenges that tenants are facing regarding the financial obligation of rent. Most landlords will want to create workable solutions with quality tenants suddenly facing extraordinary business interruptions and resulting cash shortfalls. At the same time, a landlord has its own expedient financial obligations — and of primary importance are obligations to its lender. This is not the time for good intentions to result in a violation of commercial mortgage agreements. Further, facilities costs for landlords may rise sharply at this time to maintain a hygienic environment, expenses likely not previously envisioned.

If you are a landlord desiring to create financial accommodations for tenants throughout the COVID-19 crisis, BMK can help. We will be happy to review your loan documents and advise on programs available to tenants to reduce their immediate financial burdens and enable them to keep current with rent payments. We can also explore potential modifications to commercial mortgages that may enable landlords to maintain healthy tenant relations until the crisis is past. You can reach the BMK real estate team via our main office phone, (973) 376-0909, using the extensions below or accessing the mobile telephone numbers and email addresses provided:

Keith Marlowe
Office Extension: 1120
Mobile: (973) 568-7559
kmarlowe@bmk-law.com

Richard Schkolnick
Office Extension: 1121
Mobile: (917) 514-8043
rschkolnick@bmk-law.com

Michael Greenberg
Office Extension: 1119
Mobile: (917) 716-9302,
mgreenberg@bmk-law.com

This article is for informational purposes only and is not intended to constitute, and does not constitute, legal advice.

Sticky
Apr 01, 2020
0

Impact of COVID-19 on the Medical Device Industry

By LD Friedland, Managing Director, Wombat Capital Markets, LLC

As an investment banking professional who has worked with companies and investors in the medical device industry for the last 25 years, I have witnessed a number of seminal events that have had a dramatic impact on financial markets and on the medical device industry in particular. Not surprisingly, the global impact we are currently experiencing due to the COVID-19 pandemic is unprecedented.

As I write this article in late March 2020, the governor of New York has ordered the temporary shutdown of all non-essential businesses in the state and has directed all affected workers to stay at home, and the governors of many other states have also issued “stay-at-home” orders. While the current number of infected individuals in the U.S. is unknown due to limited testing, more than 100,000 cases have been confirmed to date, with nearly half of those cases occurring in New York.

The resultant impact on the financial markets has been dramatic. Major stock market indices have seen sharp declines from their all-time highs. The Dow Jones Industrial Average experienced a decline of 38.4% from 29,568.57 on February 12 to a periodic low of 18,213.65 on March 23, while the S&P 500 Index experienced a decline of 35.4% from 3,393.52 on February 19 to a periodic low of 2,191.56 on March 23. During this same period, the Fidelity Select Medical Technology and Devices Index saw a 33% decline in its value from February 19 to March 23, as a flight to cash resulted in value declines across nearly all asset classes.

Similar dislocation has affected the private markets, as many venture capital and private equity investors seek to conserve cash and reserve resources to assist existing portfolio companies in surviving. As a result, many investors that aggressively sought new opportunities just a short time ago, are limiting their interest in potential new investment opportunities. Others are seeking to use the current market dislocation as an opportunity to acquire attractive assets at reduced prices.

How has this dislocation affected the medical device industry? That depends on which sector or end market is being considered. As hospitals and critical healthcare assets gear up for an influx of COVID-19 cases, resources are being diverted away from elective procedures and other non-critical components. For example, non-emergency dental services have been severely curtailed or shut down across the United States. The Centers for Disease Control and Prevention have advised healthcare facilities and physicians to reschedule elective surgical and procedural cases. In New York, Mayor de Blasio signed an emergency Executive Order compelling hospitals and ambulatory service centers to cancel elective procedures.

Conversely, medical device companies whose products can directly address the COVID-19 crisis are experiencing record demand. Because personal protective equipment (PPE) such as masks, gowns and gloves are anticipated to be in short supply, manufacturers and distributors of such products are attempting to respond by utilizing their resources to put such critical equipment in the right place at the right time. Innovative diagnostic companies are developing and marketing tests for the virus (or antibodies) and developing other diagnostic capabilities, such as rapid detection of fluid in a patient’s lungs, indicating COVID-related pneumonia. These companies are deploying their precious resources toward COVID-19 solutions.

Although the duration and long-term impact of COVID-19 on the medical device industry remains uncertain, the short-term impact appears to favor those companies that can facilitate the diagnosis and treatment of COVID-19. Further, while the volume of elective procedures has been and will continue to be curtailed during this crisis, companies continue to express confidence that current circumstances will result in a mere delay of elective procedures rather than “lost revenues.” As the economy adapts to a post-COVID-19 reality, the medical device industry will continue to play an important role at the forefront of diagnostic and therapeutic intervention.


BMK invites articles that may be of interest to our clients, colleagues, and friends during these trying times. BMK is not affiliated with Wombat Capital Markets LLC, and it does not endorse the content or views expressed by Wombat Capital Markets or by Mr. Friedland. Should you have questions or comments concerning the article, we suggest that you contact Mr. Friedland directly at (646) 971-0063 or friedland@wombatcapital.com

The article is not and cannot be construed as legal advice.

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Apr 01, 2020
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Covid-19 and New Jersey Economic Development Authority Relief Programs

On March 26, 2020, the New Jersey Economic Development Authority (NJEDA) initiated numerous programs aimed at helping New Jersey businesses weather the COVID-19 crisis. The programs include, among others:

  • grants for small businesses;
  • zero-interest loans for mid-sized companies;
  • support for certain lenders; and
  • technical support grants

Because funds are limited and many of the programs are run on a first come, first served basis, we urge the business community to apply at the earliest possible opportunity after the application process is opened.

Small Business Emergency Assistance Grant Program

This program provides grants up to $5,000 to NJ businesses that have between 1 and 10 full time equivalent employees. The grant funds may be used for payroll and working capital support, but cannot be used for capital expenditures. Applications are expected to open the week of March 30, 2020 and will be considered on a first-come, first served rolling basis.

Small Business Emergency Assistance Loan Program

Under this program, NJ businesses with less than $5 million in annual revenues that have been in existence for at least one year may qualify for working capital loans of up to $100,000. These loans that will have 10-year terms with zero percent interest for the first five years with deferred repayments for 12 months. Interest after the first five years will reset to the EDA’s prevailing floor rate (capped at 3.00%). Home-based businesses, and businesses related to gambling or adult services are excluded. Applications are expected to open the week of March 30, 2020 and will be considered on a first-come, first served rolling basis.

Community Development Finance Institutions (CDFIs) Programs

The NJEDA is partnering with the State’s CDFIs [1] to support them in providing financial assistance to micro and small business owners. Specifically, under the CDFI Emergency Assistance Grant Program, a CDFI may apply for up to $250,000 in funding to support its scale up of origination, technical support and underwriting capacity. The other program is the CDFI Emergency Loan Loss Reserve Fund designed to provide first loss position loan guarantees to CDFIs for working capital loans to NJ businesses. The CDFIs will be required to comply with specific loan program parameters to fit into the program. Time frames for applications have not yet been announced.

NJ Entrepreneurship Guarantee Program

The goal of this program is to provide incentives for private sector investors to provide working capital loans to NJ’s small entrepreneurial businesses. The NJEDA will guarantee 80% of the total investment amount up to $200,000 per NJ entrepreneurial company. The business must have: a minimum of 50% of its employees in NJ, less than 25 total employees, revenues under $5 million, and corporate headquarters in NJ, among other factors. The company must be in in one the following sectors: advanced manufacturing, information technology, life sciences, finance/insurance, clean energy, food/beverage, advanced transportation or film/digital media. Investors can be individuals, trusts, or corporations and must already have an equity interest and equity position in the company. They need not be NJ residents. A date for opening the application process has not yet been set.

Small Business Emergency Assistance Guarantee Program

This program provides a 50% guarantee not to exceed $100,000 to NJEDA “Premier Lenders [2]” that issue working capital loans or lines of credit to support business continuity for a range of COVID-19 consequences, including, reduced revenues, employee shortage, supply chain impact. Businesses eligible for these loans must have $5 million or less in annual revenue and be in existence for at least one year; home-based businesses ineligible. Premier Lenders will receive guidance from the NJEDA is the coming weeks. Be sure to check with the Premier Lenders for information.

Emergency Technical Assistance Program

The NJEDA will provide $150,000 in total to support technical assistance to NJ businesses applying for SBA or State COVID-19 relief programs. The organizations offering the services will be able to assist with the application processes for these programs, including preparing financial information, packaging application information and documentation, and completing and submitting the applications. A list of approved technical assistance providers will be issued soon.

NJEDA Payment Moratorium/Loan Fee Forgiveness

For existing NJEDA business customers, the NJEDA has approved a 3-month payment moratorium for eligible entities on direct loans and Premier Lender participation loans. The NJEDA is also allowing collateral releases, subordinations and substitutions on business assets, as well as waiving late fees on loan repayments and loan modification fees. The factors for eligibility include, among other things, that the borrower cannot have any active litigation with the NJEDA or any recent delinquencies on existing NJEDA loans. In conjunction with this program, the NJEDA is also waiving certain requirements related to employee presence in the office under its Grow NJ program, HUB (Urban Transit Hub) program, Business Employment Incentive Program and Business Retention and Relocation Assistance Grant Program.

NJ COVID-19 Business Support Eligibility Wizard

Additional information regarding these NJEDA programs can be found at https://faq.business.nj.gov/en/articles/3838662-what-new-state-financial-support-programs-is-my-business-eligible-for-how-do-i-use-the-eligibility-wizard .

In addition, the NJEDA has launched an on-line questionnaire that can be filled in by potential applicants that provides a list of programs that an applicant may be eligible for based on the applicant’s responses. It is user-friendly and does provide a summary of programs that an applicant should consider. It covers NJEDA programs, as well as certain SBA programs. The platform will be updated periodically and can be accessed at https://assistance.business.nj.gov/ .

[1] NJ’s CDFIs are: United Counties Development Corp.; Greater Newark Enterprises Corp.; Regional Business Assistance Corp.; New Jersey Community Loan Fund; Cooperative Business Assistance Corp.
[2] NJEDA Premier Lenders are listed on the NJEDA website.

This article is for informational purposes only and is not intended to constitute, and does not constitute, legal advice.

If you would like more guidance, please contact your Brown Moskowitz & Kallen, P.C. attorney at (973) 376-0909 via the office extensions below or the mobile telephone numbers provided.

Stuart Brown
Office Extension: 1118
Mobile: (908) 770-0166

Kenneth Moskowitz
Office Extension: 1112
Mobile: (908) 770-0160

Norman Kallen
Office Extension: 1114
Mobile: (908) 770-0165

Steven Rowland
Office Extension: 1124
Mobile: (973) 879-0544

Keith Marlowe
Office Extension: 1120
Mobile: (973) 568-7559

Richard West
Office Extension: 1126
Mobile: (973) 229-7928

Frederic Tudor
Office Extension: 1122
Mobile: (973) 476-8139

Kristina Brown
Office Extension: 1116
Mobile: (908) 239-7625

Michele-Lee Shapiro
Office Extension: 1130
Mobile: (201) 221-6814

Emilio Lamanna
Office Extension: 1129
Mobile: (516) 554-2460

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