The Importance of Lease Drafting: Lease Language Takes Center Stage in "Cinemex"

by Mark E. Ellinghouse

When in the throes of protracted lease negotiations, frustrated clients often ask me whether a proposed term is truly necessary to the contemplated transaction.  Most clients start these discussions with the goal of achieving a fair form of lease, but as consideration of the minutiae of lease provisions continues, clients typically hit a point where they no longer wish to spend any more money on legal fees and simply want to “get the deal done.”  This sentiment is both understandable and reasonable,

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Litigation Update: North Carolina Court Finds Insurers Liable Under Business Interruption Policies for COVID Losses Resulting from Shutdown Orders

by Josiah M. Prendergast, Mark E. Ellinghouse

In our last update, we highlighted a recent case out of the US District Court of Missouri (Studio 417) in which the court issued a preliminary ruling that allowed a group of policyholders to proceed with claims against their insurers based on allegations that the insurers wrongfully denied claims due to losses sustained as a result of the COVID-19 health crisis under business interruption insurance policies.  Prior to that ruling,

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California Proposition 19 Limits Parent-Child & Grandparent-Grandchild Exclusion

by Andrew D. McCarthy

Since 1986, when Proposition 58 passed, certain transfers of real property between parents and their children have been excluded from reassessment for purposes of determining property taxes. Proposition 58 provided an exclusion from reassessment for (1) a principal residence of the transferring parent, and (2) the first $1 million of full cash value of all “other real property” transferred from a parent to a child. Proposition 193, passed in 1996, added a similar reassessment exclusion for transfers between grandparents and their grandchildren (when the grandchildren’s parents are deceased).

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PPP Second Draw Loans

by Aman Badyal, Andrew D. McCarthy

In December 2020, President Trump signed into law the Consolidated Appropriations Act, 2021 (the CAA).

In total, the CAA provides $900 billion in COVID relief, including $284 billion for additional Paycheck Protection Program (PPP) loans for new borrowers and “second draw” loans for existing borrowers.

The eligibility requirements for a “second draw” PPP loan (PPP2 Loan) are as follows:

1) The borrower must spend the full amount of the first PPP loan before receiving the PPP2 Loan.

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COVID Relief Bill: PPP-Paid Expenses Are Deductible (Updated 12/28/2020)

by Andrew D. McCarthy

This past Monday, December 21, a $900 billion pandemic relief bill came out of the U.S. House and Senate. It is called the Consolidated Appropriations Act, 2021. If President Trump signs it, it will become law. Weighing in at 5,593 pages in length, it addresses many areas, including vaccines, education, childcare, jobless benefits, energy, and national security.

Part of the bill is the COVID-Related Tax Relief Act of 2020 (COVIDTRA).

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Recent Federal Decision Regarding Business Interruption Insurance Could Mark a Turning Point for COVID-Affected Businesses (Updated 9/29/2020)

by Josiah M. Prendergast, Mark E. Ellinghouse

Many businesses affected by COVID-19 and the related shelter-in-place orders are turning to their business interruption insurance policies in hope of finding relief. In general terms, a business interruption insurance policy replaces some or all of a business’s income when the business is forced to curtail or cease its operations as the result of a disaster. In the vast majority of cases, insurance companies have turned away COVID-related business interruption claims, claiming that these policies do not provide coverage for COVID-related claims.

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Recent Case Confirms Need for Landlords and Tenants to Address Force Majeure and COVID-19 in All Current and Future Agreements

by Mark E. Ellinghouse

While the effects of the COVID-19 health crisis have impacted daily life for months, the legal implications of this pandemic are just starting to develop. Unforeseen conditions often wreak havoc on existing contractual relationships, which are typically based on factual assumptions that, due to unexpected conditions like COVID-19, may no longer be appropriate. Many parties work through these circumstances through negotiation, reconciling their previous expectations and current conditions with their desired outcome, but these negotiations aren’t always successful.

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Frustration of Purpose: How Two WWII-era Cases Provide Guidance Regarding Lease Enforcement During the COVID-19 Health Crisis

by Cameron M. Peyton, Mark E. Ellinghouse

Unlike the Great Recession in 2008, landlords and tenants responding to the negative economic impact of the COVID-19 health crisis appear to be focusing more on rent relief as opposed to strict interpretation and enforcement.  Both sides seem to acknowledge that this downturn is driven by external, uncontrollable influences, and therefore each side should cooperate to weather the storm. It is the approach we most strongly encourage our clients to take, as it strengthens the relationship between landlord and tenant and avoids unnecessary expenditures on costly lease enforcement.

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Reopening Commercial Buildings: Guidelines and Legal Duties

by Shawn M. Kent

Landlords and property managers have massive amounts of guidance materials available to them as they prepare to reopen their properties. These materials detail many different things a property owner can do.  In the face of this, the question being asked by many owners is: what are they actually required to do, what is their legal duty?  Unfortunately, the answer is both fact- and circumstance-specific, taking into account the property and its users, as well as federal,

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