Blackletter

Cherylyn Harley LeBon is a partner and Ithi Joshi is an associate for Dunlap Bennett & Ludwig, practicing out of the Tysons Corner office.

NOTE: Please see Part I of DBL coverage of the PPP here

[Apr. 24, 2020 Tysons Corner]  It took less than 2 weeks to exhaust the PPP allocation of $349 billion.

The White House and Senate finalized a second relief package of $484 billion earlier this week to replenish the first round of PPP funding. Unanimously approved pro forma by the Senate, it passed in the House on Thursday, and was signed by President Trump today. The new bill, called The Paycheck Protection Program and Health Care Enhancement Act (“CARES 2.0”) builds on the preexisting CARES Act and will inject more money into the economy to ensure that businesses can meet operating expenses and keep employees on the payroll.

Democrats and Republicans were stuck in intense negotiations over what to include in the new relief package. Democrats pushed for a national testing strategy, while Republican lawmakers emphasized the need for Governors and states to take ownership with testing. Democrats insisted on hospital and testing funds, which was agreed to, and $150 billion for state and local governments, which was refused.

CARES 2.0 is set to become law in response to the PPP being criticized for supporting large corporations, as franchise restaurants and hotel chains were able to obtain funding more easily than smaller businesses. Newly revised guidance (see link for PPP Loans Frequently Asked Questions as of April 23, 2020) makes it harder for large corporations to access the new round of funding.

Under the new relief bill, a business must be able to show that the loan is 1) necessary for survival and that 2) it cannot tap into other sources of funding. Note that most publicly traded corporations have access to markets for additional capital. The Small Business Administration (SBA) has indicated that companies who applied for and received a PPP loan before the rule change can avoid scrutiny by returning the relief loans. Recently, the publicly traded burger chain, Shake Shack, returned a $10 million PPP loan after it made $150 million in stock issuance revenue.

Here are the main components of CARES 2.0:

• $310 billion to replenish the PPP
  • After the SBA was criticized for favoring larger lenders and financially robust business borrowers, $60 billion of the $310 billion must be allocated to federally insured banks and credit unions.
  • Moreover, $30 billion of this $60 billion must go to smaller lenders with less than $10 billion in assets to direct funding to those who have trouble accessing traditional forms of credit.
  • The same forgiveness rules and first-come, first-serve basis will apply to this second wave of PPP.
  
  
• $60 billion for the SBA’s Economic Injury Disaster Loan program
  • $50 billion must be used towards loans and $10 billion must be used in grants.
  
  
• $75 billion for hospitals to cover treatments related to the coronavirus and any lost revenue from cancelled, non-coronavirus related elective procedures
  • This amount is in addition to the $100 billion already allocated to hospitals under the original CARES Act.
  
  
• $25 billion for the development and expansion of coronavirus testing
  • $11 billion will be distributed to states for governors to directly manage and administer testing
  
  

Contact your DBL attorney today to see how your small business can benefit from CARES 2.0. As always, DBL is available to support you during these challenging times.

The first three states to delay the July bar exam, California, Massachusetts and New York, and students in all of those states are pushing for something called an emergency diploma privilege. No decision's been made yet, but this emergency diploma privilege would essentially allow graduates of American Bar Association accredited law schools to start practicing law without taking the bar exam due to this COVID-19 and their inability to take the bar exam. New York is right now planning to push the bar exam out until fall as close to Labor Day as possible for example, but it's a big deal because the law students are planning their careers around that bar exam date and their admission. Obviously they can't practice law or do work as a lawyer until they're admitted to the bar, and in order to do that, they have to pass a bar exam. On the one hand, some of the bar exam organizers have pointed out that in many states, 15 to 20 percent of first time takers failed the exam, so admitting everybody to the bar without any kind of examination process is letting people in that probably aren't ready to be led in. On the other hand, students and other organizations are arguing that the students are in a time of unprecedented stress and shouldn't have to go through the bar exam process, and by delaying the bar exam it's pushing off their ability to have a career on time. Basically they're having to wait. It could change the face of the legal market if there is a whole year of, not of people who aren't lawyers because of COVID-19. If that whole year of lawyers is delayed by six, seven or eight weeks, it will change the face of hiring in the legal field for a while. So stay tuned.

On today's episode Tom Dunlap remotely talks to Ross Dunlap and Ben Lepene of Ceres Nanosciences about their technology being applied to COVID-19, Ceres Nanosciences' core technologies, Lyme Disease breakthroughs and advice to Biotech startups.

The 2020 Tokyo Olympics have been pushed off til next year, and the USOC, United States Olympic Committee,  has said we're going to still use Tokyo 2020 as our brand and trademark. The same day the US Olympic Committee announced that, a company called Puma registered the trademark for Puma Tokyo 2021. This is interesting.

First, there's nothing in their filing or anything that we can find that says they have permission of the US Olympic Committee. The US Olympic Committee has special rights that exceed what every other trademark owner gets into the Lanham Act. There's this special statute 36 USC 380, that gives the United States Olympic Committee the exclusive right to use Olympic. In fact, they were able to prevent a company, an organization called SFAA from using the word Olympic as part of the Gay Olympic Games, even though a regular trademark owner would probably be able to prove the distinction. The Supreme Court of the United States said, "Nope, this special statute gives the US Olympic Committee the right to prevent almost anyone from using the word Olympic in almost any context where it might be associated with sports." As of now, the United States Olympic Committee owns three trademark registrations for Tokyo 2020. They have not applied for a Tokyo 2021 trademark registration, but that's probably because they said they plan to keep using 2020 even after the postponement, but we'll see what happens.

Tom Dunlap brings famously experienced business people, lawyers, accountants, and anyone else in the realm of business to the table to share personal experiences that have shaped their business and to talk about how to handle black letter issues in creative ways.  Topics include: Cyber Security, Federal Litigation, Estate Planning, Athletes and Immigration, CCPA, Legal Issues in Making Independent Films, Real Estate and Investments, Political Consulting and Corporate Law.