Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 3 of 3
Full-Text Articles in Law
How To Help Small Businesses Survive Covid-19, Todd Baker, Kathryn Judge
How To Help Small Businesses Survive Covid-19, Todd Baker, Kathryn Judge
Faculty Scholarship
Small businesses are among the hardest hit by the COVID-19 crisis. Many are shuttered, and far more face cash flow constraints, raising questions about just how many will survive this recession. The government has responded with a critical forgivable loan program, but for many of these businesses, this program alone will not provide the cash they need to retain workers, pay rent, and help their business come back to life when Americans are no longer sheltering in place. This essay calls on regulators to find new and creative ways to work with existing intermediaries, including banks and online lenders, who …
Bankruptcy’S Role In The Covid-19 Crisis, Edward R. Morrison, Andrea C. Saavedra
Bankruptcy’S Role In The Covid-19 Crisis, Edward R. Morrison, Andrea C. Saavedra
Faculty Scholarship
Policymakers have minimized the role of bankruptcy law in mitigating the financial fallout from COVID-19. Scholars too are unsure about the merits of bankruptcy, especially Chapter 11, in resolving business distress. We argue that Chapter 11 complements current stimulus policies for large corporations, such as the airlines, and that Treasury should consider making it a precondition for receiving government-backed financing. Chapter 11 offers a flexible, speedy, and crisis-tested tool for preserving businesses, financing them with government funds (if necessary), and ensuring that the costs of distress are borne primarily by investors, not taxpayers. Chapter 11 saves businesses and employment, not …
Covid-19 As A Force Majeure In Corporate Transactions, Matthew Jennejohn, Julian Nyarko, Eric L. Talley
Covid-19 As A Force Majeure In Corporate Transactions, Matthew Jennejohn, Julian Nyarko, Eric L. Talley
Faculty Scholarship
This paper surveys the use of pandemic-related provisions in Material Adverse Effects ("MAE") provisions in a large data set of publicly disclosed M&A transactions spanning the years 2003-2020. We document a trend towards greater use of such provisions, taking off particularly after the H1N1 crisis in 2009, and spiking again in late 2019 and early 2020. These terms are invariably located in the exclusions/carve-outs to the MAE, and they are overwhelmingly accompanied by "disproportionate effects" language that tends to dampen the effect of the carve out. There is little discernible statistical relationship between the inclusion of a pandemic-related carve-out and …