The Corridor Business Journal has selected Attorney Michael Pugh for inclusion in the 2024 edition of the Corridor Leaders 250 – an annual listing of the 250 most influential business leaders in the Corridor. This is the third consecutive year Mike has been selected.

Leaders were selected by the Corridor Business Journal’s editorial staff based on extensive contact in regional business circles, hundreds of interviews, and months of research.

The Corridor Leaders 250 edition was published in January 2024, and delivered a personal, engaging look at the region’s most influential business leaders. It was distributed to more than 20,000 CBJ readers and Iowa investors, and was be featured at the Corridor Leaders 250 networking reception on January 17th.

Pugh Hagan Prahm PLC advised College Raptor, Inc. with respect to its definitive agreement to be acquired by Citizens Financial Group, Inc.

Press Release: Citizens Financial Group, Inc. to Acquire College Raptor

The Corridor Business Journal has selected Attorney Michael Pugh for inclusion in the 2022 edition of the Corridor Leaders 250 – an annual listing of the 250 most influential executives in the Corridor.

Leaders were selected by the Corridor Business Journal’s editorial staff based on extensive contact in regional business circles, hundreds of interviews, and months of research.

The Corridor Leaders 250 edition will publish January 3, 2022, and will deliver a personal, engaging look at the region’s most influential business leaders.  It will be distributed to more than 20,000 CBJ readers and Iowa investors, and will be featured at the Corridor Leaders 250 networking reception on January 20^th.

“Real Property or Personal Property? Treatment of Manufactured Homes as Collateral “

Presented by the Bankruptcy & Insolvency Committee and Real Estate, Condemnation & Trust Litigation Committee

Tuesday, May 19, 2020 | 2:00-3:00 PM ET | 1:00-2:00 PM CT

Program Description:

Many Americans live in manufactured homes, and many are in significant financial distress due to the economic impact of COVID-19. The number of Chapter 13 filings will probably be increasing soon if they are not already. This Roundtable will look at how the bankruptcy courts address bifurcation issues under 11 U.S.C. § 1322(b)(2) if the manufactured home is the debtor’s primary residence.

Panelists:

• Chief Judge Anita L. Shodeen, U.S. Bankruptcy Court, S.D. Iowa
• Judge Paul W. Bonapfel, U.S. Bankruptcy Court, N.D. Georgia
• Steven Klesner, Esq., Johnson, Stannard, Klesner, Burbridge & Fitzgerald, P.L.C.
• Siobhan Briley, Esq., Pugh Hagan Prahm PLC – Moderator

Registration Link: form.jotform.com/201217142557145

Read Siobhan Briley’s post on manufactured homes on the American Bar Association’s website here.

FFCRA Recap and Updates

As we previously posted, the Families First Coronavirus Response Act (“FFCRA” or “Act”), provides for emergency paid sick leave and expanded Family and Medical Leave Act (“FMLA”) leave. The FFCRA went into effect on April 1, 2020. Since then, additional guidance published by the Department of Labor has provided some clarification on the applicability of Act—including clarifying the definition of “health care provider” for purposes of exemption from the Act—so we’re providing this recap and update to our previous posts.

FFCRA Overview: The FFCRA requires employers who employ fewer than 500 employees in the United States (“Covered Employers”) to provide two types of leave for certain COVID-19 related reasons: 1) emergency paid sick leave and 2) expanded leave under the FMLA. Employers who are required to pay for leave under the Act are entitled to dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the Act. Small Employers (those with fewer than 50 employees) whose businesses would be jeopardized as going concerns if they were required to comply with the paid leave provisions are exempt from the requirements of the FFCRA.

In Detail:

Emergency Paid Sick Leave:

Covered Employers are required to give employees up to 2 weeks (10 working days) paid leave at the employee’s regular rate of pay (up to $511 per day / $5,110 per 2-week period) if:

• the employee is unable to work or telework because of any of the following:

• the employee has been advised by a health care provider to self-quarantine.
  • for purposes of this provision, a “health care provider” is a licensed doctor, nurse practitioner, or other health care provider as defined in the FMLA (Department of Labor definitions found here). Please note that a different definition of “health care provider” applies when determining whether a health care provide is exempt from the FFCRA, as set forth below.
• the employer may require written confirmation of the health care provider’s order.
• the employee is quarantined under a local, state, or federal order.
• the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.

Covered Employers are required give employees up to 2 weeks (10 workings days) paid leave at 2/3 the employee’s regular rate of pay (up to $200 per day) if the employee is unable to work due to:

• a bona fide need to care for an individual subject to quarantine (either by a health care provider or government order).
• the need to care of a child (under 18 years old) whose school or child care provider is closed or unavailable for COVID-19 related reasons.
• a “substantially similar condition” if specified by the federal government.

These provisions apply to all employees of Covered Employers, including:

• employees on leave;
• temporary employees jointly employed by the Covered Employer and another employer, regardless of which employer maintains the employees on its payroll); and
• day laborers supplied by a temporary employment agency (regardless of whether the employers is the agency employer or the hiring employer).

Independent contractors are not included.

Part-time employees are entitled to pay for number of hours that the employee is normally scheduled to work during the period or for the average number of hours the employee works in a two-week period.

An employer may not require an employee to use accrued time off in lieu of Expanded Paid Sick Leave.

Expanded Family and Medical Leave Act (“FMLA”) leave:

The FFCRA also requires Covered Employers to provide additional leave to employees who have been employed for at least 30 days:

• Such employees are entitled to up to an additional 10 weeks of paid expanded FMLA leave if:
  • the employee is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable due to COVID-19.
• Leave is paid at 2/3 their regular rate of pay or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 total (over a 12-week period).

Under the FFCRA, an employee may take up to 12 weeks of expanded FMLA but the first 2 weeks would be unpaid. If an employee takes 2 weeks of Emergency Paid Sick Leave, the employee is only entitled to an additional 10 weeks of paid leave under the expanded FMLA. If there is a gap between the Emergency Paid Sick Leave and expanded FMLA leave, the first 2 weeks of the expanded FMLA leave will be unpaid (but the employee may elect to use accrued time off).

An employer may not deny Emergency Paid Sick Leave even if an employee already took leave under the expanded FMLA before April 1, 2020.

The expanded FMLA does not affect leave taken under the original FMLA. However, if an employee has already taken original FMLA leave, the employee is not entitled to an additional 12 weeks of leave—an employee is entitled to a total of 12 weeks’ leave under both the expanded FMLA and the original FMLA.

Exemptions from FFCRA requirements:

Small Employers whose businesses would be jeopardized by compliance with the FFCRA are exempt if:

• providing leave would cause the Small Employer’s expenses and financial obligations to exceed available business revenue and cause the Small Employer to cease operating at minimal capacity;
• the absence of the employee(s) requesting leave would pose a substantial risk to the financial health or operating capacity of the Small Employer because of the employee’s specialized skills, knowledge, or responsibilities; or
• the Small Employer is unable to find enough able, willing, qualified, and available workers to replace the employee during the leave period and the employee’s labor or services are needed for the Small Employer to operate at minimal capacity.

Employers of health care providers and emergency responders may elect to exclude these employees from eligibility for leave.

• for purposes of this exclusion, employees of all of the following businesses, institutions, and facilities are considered “health care providers”:
  • doctor’s offices, hospitals, health care centers, and clinics;
  • post-secondary educational institutions offering health care instruction;
  • medical schools;
  • local health departments and agencies;
  • nursing facilities, nursing homes, and home health care providers;
  • retirement facilities;
  • any facility that performs laboratory or medical testing;
  • pharmacies; and
  • “any individual employed by an entity that contracts with any of” the above employers “to provide services or to maintain the operation of the facility where that individual’s services support the operation of the facility.”
• to the extent not included in the above, a “health care provider” also includes anyone employed by any entity that:
  • provides medical services;
  • produces medical products; and/or
  • is involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments.
• employees of all of the following institutions and facilities are considered “first responders”:
  • military or national guard;
  • law enforcement officers and correctional institution personnel;
  • fire fighters, emergency medical services personnel, physicians and nurses;
  • EMTs and paramedics and 911 operators;
  • public health personnel and emergency management personnel;
  • child welfare workers and service providers; and
  • public works personnel.

How long is the FFCRA in effect?

These provisions are currently in effect until December 31, 2020.

For additional information, click here.

If You Haven’t Already …

Today (April 1) is the deadline by which employers with fewer than 500 employees must post notice regarding paid sick leave and extended family and medical leave pursuant to the Families First Coronavirus Response Act (FFCRA). If you are such an employer and you haven’t done so, you can download and print the notice here (for private employers) or here (for public sector employers).

The Department of Labor also provided answers to FAQS:

• All employers with fewer than 500 employees must post this notice, so you are required to post it even if you are a small business.
• The notice must be posted “in a conspicuous place.” This is satisfied by emailing or direct mailing the notice to employees or posting it on your internal or external website.
• Other languages: You are not required to post this notice in multiple languages, but the Department of Labor is working to translate it into other languages.
• The notice only has to be provided to current employees; you do not have to send it to recently laid-off employees. Nor do you have to share it with job applicants.
• You must, however, ensure that new hires receive it by one of the methods in the first bullet point, above.
• You are required to post this notice even if the state in which you operate provides greater protections to employees because you are required to comply with both federal and state law.
• There may be updates to this notice in the future. Check the Department of Labor’s website to ensure that you remain current with all notice requirements.
• If your employees report to a central location but then work at different worksite locations, you might need to post the notice in more than one place. The notice needs to be displayed in a conspicuous place where employees can see it. If all employees are able to see it at the main office, it is not necessary to display the notice at your different worksite locations.
• The notice is free. If you can’t download it from the link provided above, call the Department of Labor’s Wage and Hour Division at 1-866-4-USWAGE (1-866-487-9243) and they will send you one.
• You are not permitted to put the notice in a binder. It must be displayed in a conspicuous place where they are easily visible to all employees—the intended audience.

• You do not need to post the notice on every floor of your office if all of your employees will see it in a central location on one floor, such as the lunchroom. If some of your employees might not see the notice in the central location, then consider posting it in several locations where it can be seen by employees on every floor of your office.
• If your business operates out of more than one building, you must post the notice in every building.

More information can be found on the Department of Labor’s website: https://www.dol.gov/agencies/whd.

Paycheck Protection Program Loans

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides for $350 billion in loans to be administered by the Small Business Administration (SBA), referred to as the Paycheck Protection Program. The loans may be used to cover a borrower’s payroll, mortgage interest, rent and utilities for eight weeks from the date of the loan. If an eligible borrower uses the loan for qualifying expenses while maintaining its workforce the loan may be forgiven.

Qualification and Terms of Paycheck Protection Program

To qualify for the loan program, a borrower: (1) must have been in operation on February 15, 2020; (2) have no more than 500 employees; and (3) must certify that the uncertainty of current economic conditions makes necessary the loan request to support its ongoing operations.

The amount of a loan cannot exceed 250% of the borrower’s average total monthly “payroll costs” during the one-year period leading up to loan origination. Loans are subject to a maximum of $10 million. “Payroll costs” include salaries, wages, commissions, tips, paid time off, health insurance, retirement benefits, and state and local taxes not to exceed $100,000 per employee.

Amounts not forgiven (as explained below) will have a maximum maturity date of 10 years from the date the borrower applied for loan forgiveness. Interest on the loans shall not exceed 4% until June 30, 2020, but may be subject to change thereafter. All loan payments (principal, interest and fees) are deferred for at least six months, and up to one year.

Importantly, loans are to be nonrecourse, except to the extent the loan proceeds are used for a purpose other than borrower’s payroll, mortgage interest, rent and/or utilities expenses. No borrower or owner will need to provide any collateral or personal guarantee during the “covered period” (February 15, 2020 – June 30, 2020). It is unclear whether lenders will require collateral and/or a personal guarantee to spring into effect upon the loan continuing to remain outstanding (or not completely forgiven) after June 30, 2020.

Loan Forgiveness

The sum of all payroll costs, mortgage interest payments, rent and utility payments incurred and made by borrower during the eight weeks following the loan, capped at the total loan principal amount, is eligible for forgiveness. Unlike other forms of forgiveness of indebtedness, the amount of forgiveness received by a borrower will not be taxed as income.

A borrower’s maximum forgiveness amount can be reduced if it reduces its number of Full-Time Equivalents (FTEs) and/or reduces wage or salary compensation in excess of 25%. The reduction of forgiveness is reduced in proportion to the decrease in the number of FTEs during the eight week period following the loan origination and borrower’s monthly average FTEs from either (1) February 15, 2019 – June 30, 2019 or (2) January 1, 2020 – February 15, 2019.

In addition, the maximum forgiveness amount will be reduced dollar-for-dollar for any wage or salary reduction of an employee paid who is paid less than $100,000 year in excess of 25%, measured against the wage and salary for such employee during the most recent full quarter prior to loan origination.

A borrower that previously reduced its workforce or the salary/wages it pays its employees can mitigate the reductions to loan forgiveness if FTEs are re-hired and/or wages are restored by June 30, 2020.

Information for Lenders

The Paycheck Protection Program will be administered out of the existing network of approved SBA lenders. However, the SBA and Treasury Department may add qualified lenders to disburse and service loans made with the guarantee of the SBA.

Lenders can make borrower eligibility determinations without SBA approval utilizing only the program eligibility rules. Importantly, a borrower does not need to show it is unable to obtain credit elsewhere, a customary SBA loan requirement.

Loans under the program are fully guaranteed by the federal government, which is an increase to the existing guarantee percentages under the current SBA loan program.

The SBA and the Department of Treasury are in the process of developing the guidelines that will be applicable to the administration of Payroll Protection Program loans. However, the SBA must issue regulations within 15 days of enactment of the CARES Act without regard to notice and comment requirements. It is possible that lenders could begin taking loan applications in two weeks.

Recommendations for Potential Borrowers

We recommend that potential borrowers create documentation now to verify the following:

1. the number of full-time equivalent employees on payroll and pay rates for the applicable periods, including payroll tax filings, state income, payroll, and unemployment insurance filings; and

2. payments on mortgage obligations, lease obligations and utilities, including payment receipts, transcripts of accounts, or other documents.

This information must be submitted with an application for loan forgiveness. After an application is submitted, the lender has 60 days to make a determination as to whether the loan will be forgiven. Lenders will then work with the SBA to be reimbursed for the forgiven amount.