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Business tips during the Coronavirus outbreak

David Kaufman Matt Hafter Sean Crowley Caitlin Galasso March 19, 2020

As the Coronavirus pandemic continues to spread, we at Thompson Coburn are continuing to provide a variety of legal services to our clients based on the evolving situation. While every business and situation is different, the following tips may be helpful:

Reassure clients and customers

If you have not done so yet, consider sending an email or other communication to clients and other key relationships reminding them that you are open for business and outlining the steps that you are taking to continue operations.

Contracts

Review force majeure and termination for convenience clauses to determine what rights you, your customers and your suppliers may have.

Cash collection efforts

Communicate with your customers to determine if there may be disruptions in payments.

Cash and cash availability

Confirm availability under credit facilities. Consider expanding and extending credit facilities. Determine if covenants may be breached and reach out to lenders proactively before defaults occur. Re-examine sources of equity and equity as necessary.

Practice social distancing

Consider implementing remote working solutions and prohibiting or limiting visitors or deliveries to your offices and facilities.

Employment related concerns

There are a variety of employment-related questions, including impacts on workers, and their compensation and benefits to be considered. This area in particular is a rapidly evolving area, so seek guidance on any of these issues.

Health and welfare plan considerations

Carefully review plans and benefits for potential impacts.

Insurance

If you anticipate business interruption or incurring other potentially insurable loss, check your insurance policy and speak with your broker to gain an understanding of the scope of your coverage.

Tax concerns

The Administration, Treasury Department and Congress are considering a number of relief packages. On March 18, 2020, the Treasury Department issued Notice 2020-17 granting a 90-day extension to the April 15 due date for certain taxpayers with respect to income taxes and self-employment taxes (i.e., income taxes and self-employment taxes that would otherwise have been due by April 15 are now due July 15). While taxpayers can defer payment of income taxes, taxpayers are still required to file their tax returns by the April 15 deadline or otherwise file for an extension. Notice 2020-17 also states that the 90-day extension to the April 15 due date for certain taxpayers also applies to the first quarter estimated income tax payment due April 15.

Some states have followed the lead of the Treasury Department and have stated or indicated a willingness to provide a similar extension. For example, California’s Franchise Tax Board stated that individual tax filing and payment deadline of April 15 would be extended to June 15. We expect that most states will provide some form of extension to taxpayers.

Minimize the impact on other related businesses

Consider supporting other related businesses and vendors like restaurants through carry out and online ordering.

Provide healthcare resources

Many employees are looking for good, unbiased advice. Employers can be a source of this valuable information through links to the CDC, WHO and state and local health departments.

Marketing opportunities

Consider if your business can provide discounted or free services or goods or implement other special promotional efforts that could lessen the impact of Coronavirus for members of your communities. The businesses that offer such programs will bring forth much good during this difficult time.

Leadership

Examine succession plans. Review corporate documents to determine who selects new directors, managers or officers in the event that the current stakeholders or office holders are not available.

Act charitably

Due to cancellations on large events, many important charities have had to delay or outright cancel crucial fundraising events. Many more charities depend upon volunteers and other resources that may not be accessible during this difficult time. Consider making a donation to a cause important to you and your business to offset the difficulties these organizations are experiencing.

Kindness and patience

Voice and show your appreciation for individuals, organizations and businesses that are working to ensure that all of us and our communities are cared for and safe including medical professionals, food workers, and others. Stay calm, be flexible, exhibit humility and perform random acts of kindness.

We have developed a team approach to assisting with these concerns. If you have questions, feel free to reach out to any Thompson Coburn lawyer with whom you regularly communicate.

David KaufmanMatt Hafter and Caitlin Galasso are attorneys in Thompson Coburn’s Corporate & Securities Practice group and represent and advise clients on a variety of business, transactional and contractual matters. Sean Crowley is an attorney in Thompson Coburn's Tax group.

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