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A broad coalition has urged the federal government to create a recovery fund for businesses hit hard by the COVID-19 pandemic.
Representatives of 36 trade groups from real estate, insurance, retail and other sectors issued a joint letter to the Trump Administration and Congress asking for rapid delivery of liquidity to impacted businesses—regardless of size, industry or location—to mitigate a larger financial crisis.
The coalition gratefully acknowledges the loan programs instituted by the CARES Act and the Act’s support for “Main Street” businesses but advises that businesses seeking to avoid an “unprecedented systemic, economic crisis” need more liquidity.
The proposed COVID-19 Business and Employee Continuity and Recovery Fund (the “Recovery Fund”) would be financed by the government. A special administrator would oversee the fund, with significant oversight and authority to enter into contracts to provide immediate relief to eligible businesses.
The Recovery Fund would serve to help businesses retain and rehire their employees and meet operating expense obligations during a time when the businesses are unable to fully operate. Quarantine and shelter-in-place measures, travel restrictions, and social distancing measures have created an unprecedented level of disruption across all industries.
The letter warned, “[w]ithout broad-based and expeditious federal action, long-term damage to the financial markets, rampant unemployment, and irreparable harm to communities are almost certain.” The proposed Recovery Fund is modeled after the 9/11 Victims Compensation Fund and is designed to provide short-term and immediate relief to impacted businesses. Some of the signatories including National Association of Mutual Insurance Companies and International Council of Shopping Centers have issued statements in support of the establishment of the Fund and called for swift action from the government.
We will continue to monitor developments related to the Recovery Fund and provide updates as they occur.
The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis. Topics include the CARES Act, education claims, law enforcement, the real-world impact of business restrictions, and the viruses’ impact on the construction industry. Click here to register.
FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients. Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments. For more information about the Task Force, click here.
You can also contact your FMG relationship partner or email the team with any questions at [email protected].
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