The Asian American Bar Association of New York (“AABANY”) just concluded a virtual phone clinic to assist Mandarin and Cantonese speaking tenants in applying for the NYS Homes and Community Renewal’s (HCR) COVID Rent Relief Extension Program. This HCR program allowed NYS renters to seek a one-time rental subsidy for the months of April – July 2020. The program originally opened for submission in late July 2020, extended to August 8, 2020, and then re-opened the application process on December 18, 2020 until February 1, 2021. We assisted 83 callers in total: 87.5% of those callers had limited English proficiency, with most callers speaking Cantonese (41.1%) and Mandarin (46.4%). We handled this call volume with a dedicated team of 24 volunteers.
In response to the program’s second extension, AABANY organized a coalition to get bilingual information and resources out to the community. Articles ran in ethnic newspapers during the weekend of January 17, 2021, announcing our COVID Rent Relief Project 2.0. The goal of the project remote clinic was (1) to provide information to callers on how to apply, (2) if necessary, to have the volunteer and caller contact HCR’s Call Center together to reach an interpreter, and/or (3) to have the volunteer act as the interpreter. No legal advice or legal representation was provided.
At a time of increasing isolation due to the COVID-19 Pandemic and in the face of language access barriers for Mandarin and Cantonese speaking NYC residents, the AABANY Virtual Phone Clinic provided a welcome opportunity to build relationships in the community and provide assistance.
AABANY would like to thank William Lee, Vice Chair of the Student Outreach Committee; May Wong, Remote Clinic Coordinator, and the Organizers of the COVID Response Law Student Team (Nicholas Loh, Xinyi Shen, and Olympia Moy). We thank the 16 law school volunteers (representing 8 different law schools) and 5 community members who made calls, waited on hold to speak to HCR, and provided this valuable assistance to the community.
AABANY would like to thank our community leaders who partnered with us in making this clinic a possibility. They include:
AABANY’s Pro Bono and Community Services Committee – Co-chairs – Asako Aiba, Judy Lee, Karen Lin, and Karen Kithan Yau; Remote Clinic Coordinator – May Wong
AABANY’s Vice Chair of the Student Outreach Committee – William Lee
Roxy Chang, Community Organizer of Asian American For Equality
Lizzie Lee, Community Liaison from NYS Senator Brian Kavanagh’s office
On September 26, 2020, as part of AABANY’s 11th Annual Fall Conference, the AABANY Commercial Bankruptcy and Restructuring Committee hosted a panel discussion entitled “COVID-19 and Global Financial Distress: Where do We Go From Here?” The panel included:
Courina Yulisa, Bankruptcy and Restructuring Associate at Dorsey & Whitney LLP (Moderator)
William Hao, Counsel in Alston & Bird’s Financial Restructuring & Reorganization Group
Vijar Kohli, Co-founder of Golden Door Asset Management
Vincent Roldan, Partner at Mandelbaum Salsburg’s Bankruptcy and Creditors Rights, and Banking and Financial Services groups
The panelists observed a general increase in commercial bankruptcy filings accompanied by a decrease in individual Chapter 11 filings compared to last year. As the opening panelist, William Hao remarked that the phenomenon was partly due to court closures during the pandemic, which made it harder to complete filings. New York City in particular, as Vijar Kohli and Vincent Roldan explained, has been suffering from a significant reduction in traffic, negatively affecting traffic-dependent industries such as hotels and has led to a domino effect on retailers, landlords and suppliers. The absence of employees entering and leaving office buildings signaled the slow reopening of businesses. The panelists also discussed the increased accessibility of Subchapter 5 under the CARES Act to small businesses in addition to larger corporations to speed up the recovery process. And while there has been heightened pressure on landlords since the pandemic began, Vijar suggested that tenants pay attention to details such as rent payment deadlines in existing contracts and openly negotiate with landlords to lessen the COVID-imposed financial impact.
Regarding corporate strategies to preserve and increase liquidity, Vijar noted that the most significant move has been to preserve cash by increasing sales or reducing expenses. Since the protracted business recovery has added more uncertainty to the long-term trajectory of their business profitability, the lack of capital is still unfortunately a difficult problem to resolve. Vincent described the recent changes in the restaurant industry, where establishments have been transitioning to providing delivery-only services to cut production costs. Despite these challenges, William mentioned that the Paycheck Protection Program (PPP) can be helpful in getting capital temporarily, and again stressed that strategic negotiations with landlords can be particularly instrumental in preserving capital.
The panelists foresaw a slow recovery timeline for small businesses and that real estate businesses, in particular, may take up to two to three years—also depending on the vaccine distribution timeline—to bounce back to a normal level of business operations. No major changes are likely in the next three months, since the next stimulus plans would not include much for businesses and thus it is up to businesses to ensure their own survival right now. Vincent stated that companies need to pay attention to signs of economic distress to plan their next moves and contact bankruptcy lawyers to know their rights. And unlike the 2008 financial crisis, Vijar explained that this year’s economic downturns have also been accompanied by high rates of unemployment and the replacement of local, small businesses with new technology companies.
Thank you to Courina, William, Vijar, and Vincent, for this insightful panel discussion. And thank you to the AABANY Commercial Bankruptcy and Restructuring Committee, co-chaired by William and Vincent, for organizing this event. To view a recording of the panel, click here or on the image above.
On June 30, AABANY hosted a CLE program on the New York City Climate Mobilization Act’s Impact on Real Estate, featuring prominent industry leaders. The panel outlined the changes imposed by the recently passed Climate Mobilization Act, specifically Local Law 97, and their effects on both tenants and landlords. Speakers included Margaret Ling, Senior Counsel at Big Apple Abstract Corp. and Co-Chair of the AABANY Real Estate Committee; Amol Pachnanda, Partner at Ingram Yuzek LLP and Co-Chair of the AABANY Real Estate Committee; and Terri Gumula, President of MMDC Group, LLC.
The panel began by discussing the role of ESG (environmental, social, and governance) standards on real estate investments. Public emphasis has grown on corporate social responsibility with legislation and corporate mandates placing legal and social pressure on companies to adopt environmentally conscious practices. Investors are also increasingly looking toward ESG-oriented rating systems such as the GRESG as a holistic, financial benchmark. As such, investors have begun to adopt a variety of approaches to minimize negative environmental impact. Those that wish to adopt low-cost measures have opted for greater emphasis on existing maintenance protocols, cleaner filters, lighting upgrades, among others. High-cost measures include heating and cooling upgrades, boiler conversions, installation of variable speed control drives and solar panels. Generally, the push toward sustainable construction has also increased long-term performance as planning for less carbon emissions mitigates the potential losses incurred as a result of future legislation.
The panel then outlined the specifics of the New York City Climate Mobilization Act. Passed in April 2019, the Climate Mobilization Act was a series of bills and resolutions that included Local Law 97, which had stated a goal of reducing greenhouse gas emissions (“GHG”) by 80% by 2050 with an interim goal of reducing GHG by 40% by 2030. The new regulations apply to buildings over 25,000 square feet and also provide incentives for green roofs, PACE financing, and wind turbines along with other environmentally friendly building practices. Adjustments to emission limits are very limited but are available on a temporary basis with applications due July 1, 2021. Rationales for adjusting emissions limits include lack of space and financial hardship. If approved, exemptions cannot exceed one to three years, and the application will need to be refiled. Buildings with one or more rent-stabilized units have alternate requirements for the time being. As of now, rent regulated buildings require 35% of their tenants to be rent-stabilized to qualify for prescriptive measures that offer alternate standards.
We thank all the panelists for their valuable time and insights. If you would like to learn more about AABANY’s Real Estate Committee, click here.
On June 23, the Asian American Bar Association of New York (“AABANY”) presented its Small Business Navigation of COVID-19: A Briefing on Relief and Remedies panel as a part of AABANY’s wider initiative to provide support for those adversely affected by COVID-19. The event highlighted professionals working in a variety of fields and addressed concerns regarding how to safely open up and potential next steps for small businesses. The panel was moderated by Margaret Ling, Senior Counsel at Big Apple Abstract Corp. and Co-Chair of the AABANY Real Estate Committee, and featured Amol Pachnanda, Partner at Ingram Yuzek LLP and Co-Chair of the AABANY Real Estate Committee; William Ng, Shareholder at Littler Mendelson P.C.; Anthony Kammas, Partner at Skyline Risk Management, Inc.; William Hao, Counsel at Alston & Bird LLP and AABANY Treasurer; and Anthony M. Bracco, Partner at Anchin Accountants and Advisors.
Amol Pachnanda began by discussing COVID-19’s effect on the tenant-landlord relationship and best practices for tenants to avoid eviction. Tenants should be familiar with the lease agreement and seek legal counsel in any disputes with the landlord. Communication between tenants and landlords is critical as both parties possess significant incentives to avoid eviction. Tenants should be aware that the Moratorium on Evictions has been extended for an additional 60 days and any rent demands must be nullified if the tenant states that they have been impacted by COVID-19. Additionally, New York State real estate personal guarantees and “Good Guy Guarantees” have been made non-enforceable as tenants are no longer legally bound to vacate within a set timeframe if they are unable to pay their rent.
William Ng addressed how small businesses should reopen and some of the potential legal issues with phase 2 and phase 3 reopening. Business owners must go online and complete the New York Forward safety plan template and keep the plan on the premises at all times. Each business must affirm whether they have submitted a plan or have a plan in place during inspections. Small businesses are also encouraged to maintain a cleaning plan and document daily hygiene and sanitation activities to limit employer liability in the event that an employee does contract COVID-19. If an employee does contract COVID-19, small business owners are responsible for reporting the case to the relevant authorities and putting together a plan that ensures the safety of the other employees. The plan should include contact tracing measures and other appropriate protocols to limit contact and exposure.
Anthony Kammas discussed how small businesses can maintain their insurance coverage while reopening and other ways to mitigate liability. Employers should review their business policies and keep detailed records of their sanitation efforts to make sure they can retain their coverage in the event that individuals claim they contracted COVID-19 on the premises. Moreover, it is critical that employee handbooks are updated to address the challenges currently posed by COVID-19. Employers should also be mindful of the HIPAA liabilities associated with additional employee screenings. If employers contact trace, any information regarding the infected individual must remain confidential. As many policies do not cover the cost of sanitation and cleaning, Anthony Kammas recommends seeking third-party cleaning services to shift liability down away from the business owner and to the cleaning service if an incident were to occur. Small business owners should be more careful when buying new policies as carriers are becoming increasingly narrow in their wording to avoid excessive coverage.
William Hao then explained how Chapter 11 bankruptcy may be a viable option for struggling small businesses. Chapter 11 bankruptcy focuses on restructuring and reorganizing as the business undergoes a court-supervised process by which creditors and debtors come together to discharge bad debts and re-negotiate contracts and formulate a plan moving forward. Filing for Chapter 11 bankruptcy provides a business a set of tools and leverages to incentivize creditors to come to the table and establish an agreeable plan for all parties. Businesses are entitled to an automatic stay, which stops any litigation and collection efforts that are burdening them. Businesses can also reject bad contracts during this process. Creditors are incentivized to negotiate with debtors as creditors are aware that any contracts paid out during this time would amount to a smaller fraction of the original debt. In addition, the absolute priority rule is voided, and other regulations and costs that had previously barred small businesses from filing for Chapter 11 bankruptcy have been waived.
Lastly, Anthony Bracco discussed how small businesses can still apply for benefits under the Payment Protection Program (“PPP”) and the Economic Injury Disaster Loan (“EIDL”). Under the PPP, small businesses can apply for up to two and a half months’ worth of employee payroll costs with any new loans having a five-year repayment period. These loans qualify for 100% loan forgiveness if they are spent within 24 weeks and at least 60% is spent on payroll costs. The percentage of loan forgiveness is reduced if employers reduce the compensation of anyone earning $100,000 by 25% or more or reduce full-time equivalents. However, employers are not accountable for restoring full-time equivalent employment if employees are not willing to return to work or due to government shutdown. Small business owners can apply for loan forgiveness any time within the 24 week window if all of the PPP loan is spent. As for the EIDL, small business owners can obtain a loan up to $150,000 with an advance loan of $10,000. Even if the full EIDL loan is not granted, small business owners are entitled up to the $10,000 advance loan. Small business owners can apply for both the PPP and the EIDL but must deduct the $10,000 EIDL advance loan from the PPP loan. Anthony Bracco also described different options available for small business owners to cover employee costs in addition to applying for the PPP. Instead of cutting headcount by a certain percentage, small business owners can reduce employee salaries by the percentage of those that were to be terminated and the Department of Labor will cover a portion of the pay lost.
We would like to thank Margaret Ling for moderating and organizing this informative event and the panelists for their time and dedication to help those adversely affected by COVID-19. To learn more about the Real Estate Committee, click here. To view the recording from the webinar click on the image above.