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Chamberlain Corporate Update - Emergency Business Planning

The COVID-19 pandemic is having a devastating impact on businesses and the employees they support. Mass lockdowns and rapid changes in consumer and company spending are forcing businesses to scale back and implement drastic measures in an effort to survive. As businesses await clarity on how long the pandemic will last, and what local and national government will be able to do to support them, business owners can take general steps now to better position their business to handle an uncertain future.

1.  Employee Concerns 

      Employees receive constant information about the pandemic and the current state of the world. They are anxious and confused about what will happen to their families, their jobs, their communities, and the future.

-       Prioritize Frequent and Transparent Communications with Employees

  • Identify how employees are being personally affected by the pandemic and provide reassurances where possible about how you can support them
  • Communicate policies promptly and clearly
  • Include the reasoning behind policy decisions in order to foster employee engagement, instill trust and prevent surprises

-       Facilitate "New Normal" Work Routines

  • Invest in and promote work from home technology when possible
  • Establish remote work rules and guidelines to evaluate and monitor effectiveness and productivity

-       Review Employment Law Considerations

  • Be aware of the potential impact of various laws including:
    • Family and Medical Leave Act (FMLA)
    • Americans with Disabilities Act (ADA); and
    • Worker Adjustment and Retraining Notification Act (WARN Act)
  • Understand which employee benefits your business is required to maintain
  • Update or establish your communicable illness policy
    • Include items such as what sicknesses are covered, employee obligations to report, rules for sick leave, and travel restrictions.

2.  Operational Concerns

      The business of your customers, vendors, and contractors are likely affected in a significant way by COVID-19. It is important to remember that personal relationships are always critical to continued success with your business partners, especially in times of crisis.

-       Regularly Communicate with Customers, Stakeholders and the Public

  • Provide reassurance that your business is taking appropriate measures during the pandemic
  • Establish a continuing dialogue with customers to determine what they require from you

-       Determine Crucial Business Needs

  • Plan for maintaining relationships with suppliers and subcontractors
  • Work with vendors regarding the services they can realistically provide

3,  Financial Concerns

       The sudden change in how our society operates has consumers and companies significantly modifying their behavior, including careful assessment and reallocation and prioritization of their spending. Businesses must follow suit to ensure long-term survival.

-       Make a Detailed Short-Term Financial Plan

  • Continually monitor, review and update the plan
  • Get in touch with vendors, landlords and lenders that need to be paid within the next 3 to 6 months and assess options to manage or defer costs, rent and loan payments

-       Manage Cash

  • Prioritize expenses that have to be paid and identify expenses that can be put cut or put off (such as those that relate to unnecessary projects or work that can be shifted to a later date)
  • Temporarily turn off items that are auto-drafted from your bank account to best manage where and when every dollar goes

-       Review Insurance Coverage

  • Consider your business interruption insurance policy
    • Note that business interruption insurance policies are very specific and will often state detailed covered and non-covered events
    • While most business interruption policies are triggered in the event of physical property damage, each policy has different terms and coverages and should be carefully reviewed to see if they apply
    • Many business interruption policies specifically exclude pandemics; however, there are instances where coverage might still provide relief
      • For instance, if a visitor to a business tested positive for COVID-19 and the business was forced to close for a period of time to sanitize its facilities, business interruption coverage might provide some relief

-       Take Advantage of Federal Relief

  • Federal and state stimulus packages have recently been enacted to help small and mid-sized businesses and individuals negatively impacted by the virus. This includes assistance such as:
    • Low-interest federal disaster loans, including those with loan forgiveness features;
    • Employer tax credits;
    • Federal income tax deferment; and
    • Payroll tax holidays

4.   Plan for the Future

       The long-term impact of the COVID-19 pandemic is likely to change our businesses and society in important and enduring ways. Smart business owners will prepare now for the changed world that will emerge from this pandemic.

-       Use Downtime Productively

  • Work on the development of products or services that you previously did not have time for
  • Encourage staff training on new and additional skills

-       Prepare for the Next Crisis

  • Document lessons learned during this time and begin working on a plan to safeguard your business in the future
  • Implement plans and procedures for future times of crisis

 * * *

This document is intended to provide general information about legal matters of current interest. This document is not intended as legal advice applicable to specific facts and circumstances, nor does it create any attorney-client relationship between any reader and Chamberlain Hrdlicka. Readers should not act upon the information contained in this document without professional counsel. This document may be considered attorney advertising in some jurisdictions. 

Categories: Corporate, COVID-19
Tags: COVID-19
  • Amy  Moss
    Shareholder

    As a shareholder in Chamberlain Hrdlicka’s Houston office, Amy Moss represents public and private companies in a broad spectrum of corporate transactions, with an emphasis on mergers and acquisitions, restructurings, private ...

  • David B. Sheinbein
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    David is a shareholder in the firm's Business Group.  Known for helping his clients find practical and timely solutions, David is a leading corporate transactional attorney.  His clients include both private and public ...

  • David M. Pierson
    Shareholder

    As a member of Chamberlain’s Corporate, Securities & Finance Group, David Pierson's practice primarily involves mergers and acquisitions, dispositions, joint ventures and recapitalizations. Mr. Pierson is also commonly ...

  • Erica L. Opitz
    Shareholder

    Erica Opitz is a shareholder in the firm’s Atlanta office in the Corporate, Securities, and Finance practice group. Often serving as a client’s outside general counsel, Ms. Opitz assists clients with corporate governance ...

  • Joan M. McCallum
    Senior Associate

    Joan McCallum is a senior associate in the Firm’s Atlanta office in the Corporate, Securities and Finance Practice group. Ms. McCallum’s practice focuses on general corporate counseling and compliance, corporate ...

  • Nicholas N. Kemper
    Associate

    Nicholas (“Nick”) Kemper is an Associate in the Corporate, Securities & Finance practice group. Mr. Kemper focuses his practice on representing companies in a variety of transactional and securities matters, including ...

  • Scott A. Augustine
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    Scott Augustine is the Chair of the Corporate, Securities & Finance Section in Atlanta and a member of our firm’s Board of Directors.

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  • Stephen M. Leavins
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    Stephen Leavins is a licensed Certified Public Accountant since 2001 and a licensed Attorney since 2009. Mr. Leavins’ unique background and knowledge of corporate, finance and taxation matters provides the firm’s clients ...