Corporate & Commercial

For the first time to our knowledge a judge has ordered rent relief for a Chicago restaurant.   The bankruptcy judge ruled that the “Act of God” clause in the lease gives the restaurant rent relief when it was forced to closed during the the COVID-19 mandatory closings. CoronaVirus FAQs The force majeure clause in the lease of Italian restaurant Giglio’s State Street Tavern eliminated the restaurant’s obligation to pay full rent during the time when the City and State implemented the “stay-at-home order” to deal with the pandemic.   (For more info on the force majeure contact clause, see my other Blog
It was bound to happen. And I’m happy it was in Chicago, Illinois, that a restaurant and bar fought and received an equitable reduction in rent proportionate to the potential loss in revenue (more on this below) suffered by the restaurant under the COVID-19 stay at home and business closure orders issued by the State of Illinois. The restaurant/bar had filed for bankruptcy protection before the COVID-19 crisis, so the order and opinion come from the bankruptcy court in the context of the landlord and management company filing motions to be able to proceed with eviction of the restaurant/bar and…
The Small Business Administration (“SBA”) has issued two Interim Final Rules amending the Interim Final Rule they’d issued back in April. These new rules implement changes to the Paycheck Protection Program (“PPP”) made by the Paycheck Protection Program Flexibility Act. The first update can be found here. The second update can be found here. The first update effectuates the following changes for PPP loans (old and new): Extends the covered period for the loan – The old covered period ran to June 30, 2020, and that period is now extended to December 31, 2020. This means that loan…
Senators on Friday urged the Treasury Department and Small Business Administration (SBA) to simplify the process for businesses to receive loan forgiveness under the Paycheck Protection Program (PPP). “In this public health and economic emergency, we must do all we can to make sure our small businesses have the support and assistance they need to weather the crisis,” they said in a letter to Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza. Under the PPP, which was created by coronavirus relief legislation signed in late March, businesses and non profits can get loans that are forgivable if they maintain their payrolls. Treasury and the SBA released an 11 page form last month for…
After CEO and Chairman of closely held company was removed by board of directors, he sued, requesting specific performance of the removal of the other members of the board. The Chancery Court dismissed several claims in the complaint for want of personal jurisdiction, and also denied the CEO’s motion for summary judgment, finding that each side of the litigation alleged disputed facts and complex legal theories not appropriate for resolution on summary judgment. In 2016, Craig Bouchard founded Braidy Industries, Inc., a Delaware corporation with principal places of business in Kentucky and Massachusetts whose purpose is to manufacture efficient and…
Just so we’re not fuzzy on the issues – this is an appeal of the District Court’s denial of Future Proof’s request for a preliminary injunction against Molson Coors. Future Proof wanted to stop Molson from marketing and producing the Vizzy branded hard seltzer claiming it competed with and was confusable/confused/confusingly similar to/with Future Proof’s Brizzy branded seltzers (one of the reasons you request an injunction is that you don’t have to wait to appeal a preliminary injunction ruling to the end of a case – which can take years – you can appeal right after the ruling). The District
Apparently Teddy Roosevelt visited Highwood Illinois a century ago and called it one of the toughest towns in America or some such thing and the residents can’t let it go. Unlike “big apple” or “windy city” the trademark office didn’t catch that “tough” is a designation for Highwood and in applying for the trademark for craft beer, it doesn’t look like this fact was disclosed to make the trademark office aware of it. The trademark owner, Hopmaniacs is affiliated with Kings & Convicts, the brewery that made headlines last year by being affiliated with that Ballast Point sale. The…
Over the coming weeks and months, employees will begin returning to work in increasing numbers across the state. As they do, employers will find themselves facing unique challenges created by the risk of workplace exposure to COVID-19. Potential transmission of COVID-19 by employees can create liability concerns for employers. The primary concern for employers is whether they will be entitled to the tort immunity typically provided by workers’ compensation laws in light of the unique nature of the COVID-19 pandemic. Far from being just a hypothetical concern, the first workplace COVID-19 exposure case in Illinois was filed a few weeks…
A recent case involving an Illinois bar is a good reminder that insurance coverage under regular commercial general liability policies generally excludes the types of injuries and harms that taverns, taprooms, bars, restaurants, and tasting rooms are likely to encounter vis-a-vis their patrons in their operations.  In this case, a patron was injured and another shot and killed in a tavern’s connected parking lot by two other individuals that had previously been drinking inside the same tavern. The estate of the deceased patron and the injured patron sued the bar and the bar sought coverage under its commercial general liability…
More than $130 billion in Payroll Protection Program funding is still available for small businesses, independent contractors, and nonprofits, but the opportunity is about to end. While the time to spend PPP money was just extended, the last day a PPP request (and essentially free money) can be made is only weeks away – June 30th, 2020. More requirements were just released over the weekend on how the program works once you have the funds to spend. The most important of these are that at least 60% of the PPP funds must be spent on compensation costs, and the employee head count requirement (should you have employees)…
Amendments to the SBA Payroll Protection Program became law on Friday, June 5th, which extend the time to spend PPP money from eight (8) weeks to twenty-four (24) weeks. However, relying on this new 24 week time has disadvantages, due to penalties from pay reductions or lower headcounts during the extended 16 weeks time. If you already have a PPP loan, you do have the option of retaining the original eight (8) week time period. If your 8 weeks is nearly up, it is time to start preparing the eleven-page SBA Loan Forgiveness Application, unless you wish to see your…
Agriculture Bankruptcy & Marshalling of Assets General marshaling principles. The equitable doctrine of marshaling rests upon the principle that a creditor having two funds to satisfy his debt should not be permitted to arbitrarily prejudice a junior creditor who may resort to only one of the funds. Meyer v. U.S., 375 U.S. 233, 236, 84 S.Ct. 318, 11 L.Ed.2d 293 (1963).  Bankruptcy and Ag Financing Issues The greatest challenge to any secured transaction arises when a borrower files a proceeding under the Bankruptcy Code. Originally enacted in 1986, Chapter 12 of the Bankruptcy Code provides a procedure by which family…
Widow Jane Distillery makes whiskey. Before 2018 some of the bottles looked like this: That pre-2018 label included these phrases: (1) “Kentucky Bourbon Whiskey Aged 7 Years In American Oak” and (2) “Pure Limestone Mineral Water From the Widow Jane Mine – Rosendale, NY.”  After 2018 their labels looked like this on the front: And looked like this on the back: The post 2018 labels contained the following statements: (1) “Pure Limestone Mineral Water From the Legendary Rosendale Mines of NY,” (2) “Hand assembled in Brooklyn using the richest and rarest straight bourbons … non-chill filtered & proofed with our…
The Illinois legislature has passed a bill that codifies the previously invalidated workers’ compensation rule creating a rebuttable presumption that an employee injured or killed by COVID-19 contracted the virus at work and is entitled to benefits. The new law, HB 2455 creates a rebuttable presumption against employers – basically making it their obligation to disprove, rather than the employee’s obligation to prove, that their COVID-19 was contracted during employment and not elsewhere, thereby creating liability for the employer for their COVID-9 related injuries: “[I]f the employee’s injury or occupational disease resulted from exposure to and contraction of COVID19, the…
Congress just passed changes to the PPP program, now headed for presidential approval: Extends the eight-week spending period of PPP funds for an additional 16 weeks Increases the repayment time for unforgiven funds to five years for most applicants Changes the forgiveness requirement maximum for non-payroll expenses from 25% to 40%, with a severe penalty if the 40% is exceeded Permits full forgiveness where the employer shows it is unable to reinstate or replace furloughed or former employees, under specified circumstances Extends FICA Tax deferment to PPP borrowers A number of points remain subject to SBA interpretation/guidance, which we expect soon after the bill becomes law. The PPP program has grown…
Unfortunately, the fluid situation regarding the COVID-19 epidemic has left many, including congress, reacting at a pace that may have been too slow to impact the spending of the PPP funds some businesses received prior to this latest amendment to the PPP loan program. There are likely quite a few employers that have met the 8-week requirement and spent their funds who will now not have the ability to take advantage of these extensions. Congress has now passed reforms headed to the executive for signature. The Bill: Extends the eight-week period for spending to 24 weeks or the end of…