Skip to content

Under new guidance from the Small Business Administration (SBA) issued through a Procedural Notice (Notice) on Oct. 2, 2020, certain PPP borrowers may be required to seek prior consent from the SBA for a change in ownership of equity or sale of assets. Notably, the Notice addresses a change in ownership interest of the PPP borrower itself, but does not specifically address changes in ownership at the level of the borrower’s affiliates. Absent additional guidance, presumably no SBA or lender approval would be required for a change in ownership at a borrower’s affiliate if the transaction did not have a bearing on the PPP borrower, its direct assets, or equity interests. The Notice establishes different categories of transactions, some of which may require prior approval of the SBA, and is effective for all transactions that close on or after Oct. 2, 2020.

Prior to the closing of any change of ownership transaction, a PPP borrower must notify its PPP lender in writing of the contemplated transaction and provide the PPP lender a copy of the proposed agreements or other documents that would effect the proposed transaction. The original loan documentation itself may contain covenants triggering lender consent to the transaction as well and should be reviewed accordingly, although compliance with the Notice requirements will still be required. The Notice states that, where SBA approval is required, the SBA will review and provide its decision within 60 days of receipt of a completed request. This up-to-60-day waiting period could result in a significant delay of the closing of the transaction. Accordingly, a determination of whether prior approval is required should be made early in the transaction process.

The foregoing analysis and summary reflects guidance issued by the SBA through Oct. 9, 2020. Additional guidance may be issued that materially alters the information set out in this GT Alert. For more information and updates on the developing situation, visit GT’s Health Emergency Preparedness Task Force: Coronavirus Disease 2019 or GT’s COVID-19 Economic Stimulus Team. For more information, contact Tel Aviv members of GT’s COVID-19 Economic Stimulus Team- Meira Ferziger (Shareholder, Labor & Employment), Ephraim Schmeidler (Of-Counsel, Corporate) and Aaron Katz (Associate, Corporate).

Read the full GT Alert

Print:
EmailTweetLikeLinkedIn
Photo of Bryan X. Grimaldi Bryan X. Grimaldi

Bryan Grimaldi counsels corporate clients, trade associations, destination marketing organizations, and public-private partnerships (P3) nationwide providing industry-specific, cost effective, outside counsel services, operational consulting, and advocacy. With deep knowledge of politics and the ability to navigate complex issues in dynamic environments, Bryan provides

Bryan Grimaldi counsels corporate clients, trade associations, destination marketing organizations, and public-private partnerships (P3) nationwide providing industry-specific, cost effective, outside counsel services, operational consulting, and advocacy. With deep knowledge of politics and the ability to navigate complex issues in dynamic environments, Bryan provides clients a unique perspective on how to deftly handle making an organization successful and bridge the gap between business goals and legal issues, among multiple constituencies.

Bryan develops tailored strategies for his clients as well as with businesses experiencing legal and policy obstacles with their city. He has broad experience in the travel & tourism industry, government relations, not-for-profit management and public/private partnerships.

Bryan draws from his nearly 15 years as Chief Operating Officer & General Counsel at NYC & Company, Inc, New York City’s official marketing, tourism, and partnership organization, where he led the organization on legal, business development, licensing, government relations, regulatory, and policy matters. Bryan provided strategic counsel and advised on matters that advanced the organization’s mission, while growing and protecting its funding streams.

Having served three mayors of New York City, Bryan has deep government experience, credibility, and broad knowledge of the private sector, including sports leagues, marketing firms and industry associations, particularly in relation to the travel, tourism, and hospitality industries.  He draws on his wide-ranging understanding of policy issues and the regulatory schemes of cities, states, and the federal government to represent clients in policy initiatives, transactions, and government relations matters. In his role at the membership-based trade association NYC & Company, Bryan lead the organization on legal, regulatory and policy matters with a focus on the members’ strategic objectives and provided advice on matters that advanced the organization’s mission. He was responsible for centralizing New York City’s marketing, licensing, and other intellectual properties, including the NYPD and FDNY brands.

Bryan previously served as general counsel in the Mayor’s Office of International Affairs, where he provided legal counsel and support to city agencies and senior administration officials in dealings with the United Nations, foreign governments, diplomats, and federal agencies.

Photo of Barbara A. Jones Barbara A. Jones

Barbara A. Jones is a member of the firm’s Global Securities practice group and serves as Co-Chair of the firm’s interdisciplinary Blockchain & Cryptocurrency practice group. She is also co-coordinator of the firm’s interdisciplinary Conflict Minerals Compliance Initiative. Barbara maintains a diverse corporate

Barbara A. Jones is a member of the firm’s Global Securities practice group and serves as Co-Chair of the firm’s interdisciplinary Blockchain & Cryptocurrency practice group. She is also co-coordinator of the firm’s interdisciplinary Conflict Minerals Compliance Initiative. Barbara maintains a diverse corporate and securities law practice across industry groups, emphasizing complex international and domestic transactions, including blockchain and cryptocurrency transactions, private and public financings (including token offerings), dual listings, mergers and acquisitions, strategic collaborations and joint ventures, and licensing transactions. Her practice includes serving as a trusted advisor to public and private company boards of directors on governance and complex regulatory reporting and compliance issues. Barbara’s clients include financial institutions, private equity and venture capital groups, and companies in blockchain, life sciences and biotechnology, information technology, energy (traditional and renewable), mining, defense and security, telecommunications, media, entertainment and sports. Barbara is also active in the representation of Olympic athletes and sports-related organizations.

Barbara practiced U.S. law in London from 1990 through 2003, and headed the international capital markets practice of a major U.S. law firm from 1999 to 2003 before relocating to Boston. From 1997 to 1999, she served as Vice-President, Assistant General Counsel and Regional Counsel for capital markets with J.P. Morgan Securities Ltd. in Europe, the Middle East and Africa. Since returning to the U.S., she has continued to actively represent public and private companies, private equity groups and investment banks in the European, Scandinavian, African and greater Asian markets, including China.

Barbara is a past chair of the ABA’s Subcommittee on International Securities Matters. She is a frequent speaker at conferences relating to cross-border securities matters and strategic alternatives.

Photo of Carl A. Fornaris Carl A. Fornaris

Carl A. Fornaris is Co-Chair of the firm’s Financial Regulatory and Compliance Practice. With 27 years of legal experience, Carl advises a broad range of financial services firms – banks and their holding companies, money services businesses, investment advisers, securities broker dealers, gaming

Carl A. Fornaris is Co-Chair of the firm’s Financial Regulatory and Compliance Practice. With 27 years of legal experience, Carl advises a broad range of financial services firms – banks and their holding companies, money services businesses, investment advisers, securities broker dealers, gaming firms, Fintechs, cryptocurrency firms and other institutions – on all aspects of their business. These include formation and licensing, capital-raising transactions, acquisitions and divestitures, USA PATRIOT Act/BSA/AML compliance and OFAC sanctions programs, cryptocurrency regulation, mobile money and FinTech, federal and state agency enforcement proceedings, Dodd-Frank Act compliance and COVID-19/CARES Act economic stimulus program advice (ranging from Small Business Administration PPP loans to Federal Reserve Main Street program loans). Throughout his career, Carl has counseled clients in their dealings with the Federal Reserve, OCC, FDIC, FinCEN, SEC, FINRA, Florida Office of Financial Regulation, New York Department of Financial Services and other state supervisory authorities.

Carl is also active representing lenders and credit parties in financing transactions, particularly credits to non-U.S. loan parties, asset-based credits, acquisition financing and stand-by letters of credit.

Carl is a past General Counsel of the Florida International Bankers Association and sits on its Board of Directors. Previously, he served as Head of Legal and Compliance for the Latin America region of Barclays Bank PLC, with responsibility for managing legal and compliance matters throughout the region. Carl is an adjunct professor in the Business Law Department of the University of Miami Business School.

Photo of Lee Ann Anderson Lee Ann Anderson

Lee Ann Anderson focuses her practice on capital markets, structured finance and corporate transactions, with broad experience in U.S. and cross-border securities offerings. In the current global crisis, Lee Ann serves as a member of our COVID-19 Economic Stimulus Response Team and has…

Lee Ann Anderson focuses her practice on capital markets, structured finance and corporate transactions, with broad experience in U.S. and cross-border securities offerings. In the current global crisis, Lee Ann serves as a member of our COVID-19 Economic Stimulus Response Team and has counseled scores of companies about relief under Titles I and IV of the CARES Act and relief programs established by the Federal Reserve.

Lee Ann counsels issuers and investment banks on certificates of deposits, including rates-, commodities-, equity-, and proprietary index-linked products. She has wide-ranging experience in debt and equity capital markets, securitizations, and other structured finance transactions. Her practice has included scores of domestic and international debt and equity offerings, as well as securitizations of receivables and other collateral, complex tax-based structures utilizing swaps and other derivatives. Lee Ann also has advised a number of foreign and domestic public companies with respect to a wide range of corporate and securities matters, including reporting obligations.

Additionally, Lee Ann has deep experience counseling clients on corporate transactions, including mergers, stock purchases, asset sales, joint ventures, and other reorganization transactions. She also provides a range of general corporate and governance advice. Lee Ann has a strong commitment to pro bono work and served as a pro bono coordinator at her previous firm.