Teri A. Lindquist Partner

While debates in Congress continue regarding extending or providing additional COVID-19 relief legislation, the Small Business Administration (SBA), U.S. Department of Treasury (Treasury), and lenders under the Paycheck Protection Program (PPP) are preparing for the next wave of activity for PPP loans.

This update amends our prior publication on June 5, 2020, and contains new information based on additional guidance provided by the Federal Reserve on June 8, 2020.

This update amends our prior publication on May 4, 2020, titled Federal Reserve Announces Changes to Main Street Lending Program and contains new information based on additional guidance provided by the Federal Reserve on May 27, 2020.

The U.S. House of Representatives, on May 28, 2020, passed with bipartisan support H.R. 6886, referred to as the Paycheck Protection Program Flexibility Act of 2020.

On May 15, 2020, the Small Business Administration (SBA) released an application for loan forgiveness under the Paycheck Protection Program (PPP).

Borrowers who, together with their affiliates, received Paycheck Protection Program (PPP) loans in an aggregate amount less than $2 million will be deemed to have made their certification that the loan was “necessary” in good faith, according to new guidance issued by the U.S. Small Business Administration (SBA).

The Federal Reserve Board released updated guidance on its Main Street Lending Program (Main Street Program) on April 30, 2020. Authorized under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and previously announced on April 9, 2020, the Main Street Program will indirectly offer loans to small- and medium-sized businesses to alleviate economic distress caused by the spread of COVID-19.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed into law on March 27, 2020, established the Paycheck Protection Program (PPP), a loan program that made $349 billion available to small businesses using the Small Business Administration’s (SBA) existing 7(a) loan program.

In a recent decision by the Delaware Court of Chancery, Auriga Capital Corp. v. Gatz Properties, LLC, C.A. 4390-CS (Del. Ch. Jan. 27, 2012), the court strongly reaffirmed that managers of a limited liability company owe traditional fiduciary duties to the limited liability company and its minority members unless such duties are explicitly reduced or eliminated by the terms of the limited liability company's operating agreement.

The Securities and Exchange Commission recently proposed a new rule to conform the definition of “accredited investor” to the requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act.  In addition, the SEC’s proposed rules also clarify the treatment of debt secured by the property in the calculation of net worth.

On November 19, 2010, the Securities and Exchange Commission proposed a new rule, based on requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Financial Reform Act, defining “venture capital funds” for purposes of exempting advisers to these funds from registering under the Investment Advisers Act of 1940.

On October 12, 2010, the Securities and Exchange Commission proposed a new rule, based on requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Financial Reform Act, defining “family offices” that will be excluded from regulation under the Investment Advisers Act of 1940.

On July 28, 2010, the Securities and Exchange Commission adopted amendments to Part 2 of Form ADV, the form used by investment advisers to register with the SEC and state securities regulators.  These amendments are effective for filings made on or after October 12, 2010.  Also affecting advisers are changes made as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Financial Reform Act, which President Obama signed into law on July 21, 2010. Both the SEC's recent action and the Financial Reform Act make a variety of changes to the Investment Advisers Act of 1940.

On June 30, 2010, the House of Representatives approved the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Financial Reform Act, a comprehensive and expansive set of financial reforms widely thought to be the toughest changes to financial regulation in the United States since the Great Depression.