Would you like to read more?Register for free to finish this article.Sign up now for the following benefits:Four FREE articles of your choice per monthBreaking news, comment and analysis from industry experts as it happensChoose from our portfolio of email newsletters To access this article REGISTER NOWWould you like print copies, app and digital replica access too? SUBSCRIBE for as little as £5 per week.
Nick VasquezEarly sentiment that successful containment of the virus and a swift bounce in business performance is giving way to fear of a protracted period of disruption and a slow hard recovery. Monika Lorenzo-PerezBrown Rudnick has re-mobilised its resources to be on top of the challenges facing the industry and track the government responses. Our corporate, finance and restructuring teams are closely co-ordinating to advise clients in real time on how best to react to the current environment. These are our suggestions so far.Borrowers should be re-familiarising themselves with their financing documents, particularly the financial covenants provisions. Financial covenants are generally used as an early warning indicator that the financial health of a borrower is slowing or failing. Although the trend in recent years in the US & Europe are ‘covenant-lite’ facilities, the impact of COVID-19 has led to such significant trading challenges with an almost overnight reduction in revenue meaning that financial covenants may well already have been breached. In the context of reviewing financial covenants, a borrower should consider: whether the covenants are calculated and tested on historic performance or if there is also a forward looking element; how much head room has been built in to the covenants and whether any add-backs are available which could be used to limit the impact of decreased net income; and whether there are any cure rights available which obligors may be in a position to exercise.Borrowers should also be wary of material adverse change (“MAC”) clauses in finance documents, giving lenders further leverage to negotiate in a distressed situation – further discussed in our alert on force majeure, frustration and MAC clauses.Early engagement with lenders is key and if lenders have not yet been in contact, it is never too early to be picking up the phone to the relationship manager and updating them on where things stand and what options are available. These options may include a financial covenant holiday, waiver of a financial covenant breach or amending the financial covenant provisions. In any amendments to the financing documents, it will be necessary to strike the right balance between agreeing amendments which will provide lenders with the comfort that they may require in these turbulent times as against tightening terms to such extent that borrowers find themselves unable to effectively manage their business. There is good news. Most lenders will be willing to entertain discussions to deal with the emergency and unforeseen disruption. Enforcing is a pain for lenders at the best of times, and more so in a disrupted market (if we learnt anything in the last financial crisis), and where there are large numbers of potential defaults lenders will be grateful for borrowers showing initiative and realistic survival plans. The drops in interests rates will also help with debt pegged to official rates. In the UK, certain SME borrowers may also consider asking their lender about availability of the Government’s new guaranteed loan schemes, with the Coronavirus Business Interruption Loans Scheme providing up to £5m of government guaranteed loans for enterprises with a turnover of £45m or less – refer to Brown Rudnick’s alert on this topic for more details – and the newly announced Coronavirus Large Business Interruption Loan Scheme, providing loans of up to £25m to companies with a turnover of £45m to £500m. Be wary that despite the UK Government guarantee, borrowers are still liable for the full amount borrowed and will still need to present a credible borrowing proposal.Plans and proposals need to be realistic, or at least have reasonable assumptions about how the situation will play out. The shock is a minefield for company directors, who need to consider their duties carefully and avoid potential personal liability in the event that trading continues in an irreparably insolvent position.The UK Government may be softening the position on wrongful trading and introducing a moratorium for companies while they seek a rescue or restructuring on insolvency procedures, but there is very little detail on these proposed changes and until more is known it is business as usual for directors who should be making decisions , on a reasonable basis, to ensure so far as possible that the company’s stakeholders, most notably the creditors, get the best return possible as we begin to emerge out of this crisis. We recommend boards seek advice sooner rather than later and don’t allow the breathing space provided by Government action or commercial lenders to give a false sense of security.Otherwise to weather the storm, cash is king. Wages cover from the Coronavirus Job Retention Scheme and support for the self-employed from the Government will help support a decimated workforce. Business rates relief is available for the hospitality industry in England. Capital expenditure plans will be put on hold (albeit one idea touted in the market, at least until the lockdown made it impractical, is to use the drop in occupancy rates to push forward with major refurbishment plans). As in other countries, some hotels are in the short-term be re-purposed to support key workers or otherwise help in the effort to control the virus. Following the example in China, F&B parts of hotels may be able to link up with delivery services to keep that part of the business operational.If a hotel owner can’t (or doesn’t want to) agree a restructuring to something more manageable, perhaps they can find someone who can. There has for some time now been an active, competitive market in hotels as an asset class. Despite some positive long-term trends flattening out recently, there’s still plenty of money and new ideas, with enough of a long term view, to provide some liquidity (this is, for now, one contrast between the current situation and the global financial crisis of 2008-2010, where practically all capital dried up). At this stage, the fog of war still needs to clear sufficiently for the outlook and the opportunities to become clearer, but when that happens, there’s money waiting in the wings.So among all the distress, there are still deals to be done. China is currently the bell weather for the spread of the virus and industry hit, and can also provide clues as to how the recovery will play out – so far there are some indications of a bounce there led by growing demand in the domestic market. Perhaps the more bullish will find good buying opportunities in distressed assets in advance of a bounce, or the bears will be exiting at the right moment at the start of a long dark night for the industry. Time will tell.We at Brown Rudnick wish everyone the best of health and the strength to face the many challenges at home and at work that these difficult times bring. In the meantime, we are open for business and here to help.The views expressed herein are solely the views of the authors and do not represent the views of Brown Rudnick LLP, those parties represented by the authors, or those parties represented by Brown Rudnick LLP. Specific legal advice depends on the facts of each situation and may vary from situation to situation. Information contained in this article is not intended to constitute legal advice by the authors or the lawyers at Brown Rudnick LLP, and it does not establish a lawyer-client relationship.
An ambitious county program to replace aging and faulty septic systems with grant money took a hit this week when the Internal Revenue Service ruled the grant money is taxable. The ruling quickly became a political football, with Suffolk Democrats, including Suffolk County Executive Steve Bellone, blaming Suffolk County Comptroller John Kennedy, a Republican, for seeking the IRS’s opinion on the matter to begin with. Since the program’s inception in 2017, the county has disbursed 293 grants and expended $3 million. The county also received $10 million in state funding for the septic system program. In January, 111 homeowners signed up for grants, said Deputy County Executive Peter Scully. He accused Kennedy of “playing politics with water quality.” “The comptroller’s decision to seek an IRS ruling may now expose county homeowners to new tax liability and undermine a critical water quality program,” Scully said in a statement. Kennedy scoffed at the notion he was in any way responsible, noting the IRS ruling would have come down sooner or later, whether he petitioned for adecision or not. The comptroller acknowledged that the ruling “may not be popular,” but aid it “validates the approach we have taken all along” to issue the tax forms. He blamed the tax burden on how the program was set up, not on his request. There are an estimated 360,000 outdated and environmentally-harmful septic tanks and systems currently in use in Suffolk. Nitrogen pollution has been identified as perhaps the leading pollutant of water bodies. “The comptroller’s actions have been contrary to the intent of the Suffolk County Drinking Water Protection Program, the legal opinion by the county’s tax counsel, and longstanding practices used by similar programs in Maryland and other municipal jurisdictions,” Bellone said. “He chose to politicize water quality.” The ruling comes after Kennedy requested guidance on whether the grants should count as income. Last year, he sent tax forms to homeowners who used the grant program, catching them off-guard and igniting a political fight with Bellone, whom he was running against for county email@example.com Share
By Rania El Gamal and Tom FinnDOHA (Reuters) – Top oil exporters Russia and Saudi Arabia agreed on Tuesday to freeze output levels but said the deal was contingent on other producers joining in – a major sticking point with Iran absent from the talks and determined to raise production.The Saudi, Russian, Qatari and Venezuelan oil ministers announced the proposal after a previously undisclosed meeting in Doha. It could become the first joint OPEC and non-OPEC deal in 15 years, aimed at tackling a growing oversupply of crude and helping prices recover from their lowest in over a decade.Saudi Oil Minister Ali al-Naimi said freezing production at January levels – near record highs – was an adequate measure and he hoped other producers would adopt the plan. Venezuelan Oil Minister Eulogio Del Pino said more talks would take place with Iran and Iraq on Wednesday in Tehran.“The reason we agreed to a potential freeze of production is simple: it is the beginning of a process which we will assess in the next few months and decide if we need other steps to stabilise and improve the market,” Naimi told reporters.“We don’t want significant gyrations in prices, we don’t want reduction in supply, we want to meet demand, we want a stable oil price. We have to take a step at a time,” he said.Oil prices jumped to $35.55 per barrel after the news about the secret meeting but later pared gains to trade near $33 on concerns that Iran may reject the deal and that even if Tehran agreed it would not help ease the growing global glut.OPEC member Iran, Saudi Arabia’s regional arch rival, has pledged to steeply increase output in the coming months as it looks to regain market share lost after years of international sanctions, which were lifted in January following a deal with world powers over its nuclear programme.“Our situation is totally different to those countries that have been producing at high levels for the past few years,” a senior source familiar with Iran’s thinking told Reuters.Iranian Oil Minister Bijan Zanganeh also indicated Tehran would not agree to freezing its output at January levels, saying the country would not give up its appropriate share of the global oil market.SPECIAL TERMSThe fact that output from OPEC kingpin Saudi Arabia and non-OPEC Russia – the world’s two top producers and exporters – is near record highs complicates any agreement since Iran is producing at least 1 million barrels per day below its capacity and pre-sanctions levels.However, two non-Iranian sources close to OPEC discussions told Reuters that Iran may be offered special terms as part of the output freeze deal. “Iran is returning to the market and needs to be given a special chance but it also needs to make some calculations,” said one source.Russian Deputy Prime Minister Arkady Dvorkovich said freezing output was not a problem for his country as he anyway expected its production to be flat this year versus 2015.An Iraqi oil ministry source said Baghdad was also happy to freeze production if all parties agreed.“The agreement (if successful) should support oil prices but there are reasons to be cautious. Not all OPEC members have signed up to the deal – notably Iran and Iraq. History would also suggest that compliance may be an issue,” said Capital Economics’ analyst Jason Tuvey.OPEC has been quarreling for decades over output levels and Russia, which last agreed to cooperate with OPEC back in 2001, never followed through on its pledge and raised exports instead.Also complicating any potential agreement is the geo-political rivalry in the Middle East between Sunni Muslim power Saudi Arabia and Shi’ite Iran. Saudi Arabia and its Gulf allies are fighting proxy conflicts with Russia and Iran in the region, including in Syria and Yemen.In Syria’s five-year-old civil war, Riyadh politically and financially backs some rebel groups battling President Bashar al-Assad’s government, which has gained the upper hand with the help of Russian warplanes and Iranian-backed Shi’ite militias.RUSSIAN BUDGETThe Doha meeting came after more than 18 months of declining oil prices, knocking crude below $30 a barrel for the first time in over a decade from as high as $115 a barrel in mid-2014.The slump was triggered by booming U.S. shale oil output and a decision by Saudi Arabia and its OPEC Gulf allies to raise production to fight for market share and drive higher-cost production out of the market.But although U.S. output has begun to decline and global demand has been robust it has still not been enough to offset booming global production which has led to oil stockpiles rising to record levels.Saudi Arabia has long insisted it would reduce supply only if other OPEC and non-OPEC members agreed, but Russia – the world’s biggest oil producer and No.2 exporter – has said it would not join in as its Siberian fields were different from those of OPEC.The mood began to change in January as oil prices fell below $30 per barrel.While Venezuela has been the hardest-hit producer, current oil prices are a fraction of what Russia needs to balance its budget as it heads towards parliamentary elections this year. Saudi finances are also suffering badly, running a $98 billion budget deficit last year, which it seeks to trim this year.But while talking about potential cooperation with OPEC, Russia raised its output to a new record high in January. For a table on OPEC and Russian output, click here“Even if they do freeze production at January levels, you have still got global inventory builds which are going to weigh on prices. So whilst it’s a positive step, I don’t think it will have a huge impact on supply/demand balances, simply because we were oversupplied in January anyway,” said Energy Aspects’ analyst Dominic Haywood.(Additional reporting by Alex Lawler, Reem Shamseddine, Ahmad Ghaddar and Amanda Cooper; Writing by Dmitry Zhdannikov; Editing by Dale Hudson and Pravin Char)
Get your free guest access SIGN UP TODAY Stay at the forefront of thought leadership with news and analysis from award-winning journalists. Enjoy company features, CEO interviews, architectural reviews, technical project know-how and the latest innovations.Limited access to building.co.ukBreaking industry news as it happensBreaking, daily and weekly e-newsletters Subscribe now for unlimited access To continue enjoying Building.co.uk, sign up for free guest accessExisting subscriber? LOGIN Subscribe to Building today and you will benefit from:Unlimited access to all stories including expert analysis and comment from industry leadersOur league tables, cost models and economics dataOur online archive of over 10,000 articlesBuilding magazine digital editionsBuilding magazine print editionsPrinted/digital supplementsSubscribe now for unlimited access.View our subscription options and join our community
Get your free guest access SIGN UP TODAY To continue enjoying Building.co.uk, sign up for free guest accessExisting subscriber? LOGIN Stay at the forefront of thought leadership with news and analysis from award-winning journalists. Enjoy company features, CEO interviews, architectural reviews, technical project know-how and the latest innovations.Limited access to building.co.ukBreaking industry news as it happensBreaking, daily and weekly e-newsletters Subscribe now for unlimited access Subscribe to Building today and you will benefit from:Unlimited access to all stories including expert analysis and comment from industry leadersOur league tables, cost models and economics dataOur online archive of over 10,000 articlesBuilding magazine digital editionsBuilding magazine print editionsPrinted/digital supplementsSubscribe now for unlimited access.View our subscription options and join our community
CPCS concluded that border friction reflects the additional delay, risk, administrative burden, and ultimately cost from differences in regulations. Border friction does not reflect the degree of regulatory restrictiveness itself. For example, two states that both have restrictive axle weights, or strict civilian escort requirements, are shown as sharing a border with a low friction ranking.This analysis places OS/OW permitting and regulations in a regional and national context, while providing an opportunity for states to identify problem borders and the drivers of friction between neighboring states.Furthermore, this analysis can be tailored to the needs of a specific state or industry based on a variety of factors including the size and frequency of OS/OW moves, the importance of specific economic sectors to the state economy or to account for differences in infrastructure.In what it cites as a high friction example, CPCS says that New York, New Jersey, and most of the New England states are among the most restrictive states when it comes to OS/OW regulations. However, they are not necessarily restrictive in a coordinated way.For example the New York-New Jersey border shows significant friction driven partially by relatively strict restrictions regarding police and civilian escorts in New York. New York also does not allow Sunday travel and does not allow permit revisions or extensions. However, New Jersey has longer processing time for trip permits, and New Jersey has relatively strict utility notification requirements, whereas New York leaves it up to the carrier.The TRB report on OS/OW freight, which also puts forward practical solutions for improving multi-state OS/OW transportation, will be published in the coming months.The Specialized Carriers & Rigging Association (SC&RA) has been working very closely with CPCS on this report for TRB.Click here for a map that depicts state border friction.www.cpcstrans.comwww.scranet.org
Constructed at Sembcorp Marine’s Tuas Boulevard Yard (Singapore) for owner Heerema Marine Contractors, Sleipnir has a 220 m x 102 m reinforced deck area; a pair of revolving cranes can lift 20,000 tonnes in tandem, exceeding the capabilities of any other crane vessel currently on the market.Sleipnir can accommodate 400 people and will be deployed globally for installing and removing jackets, topsides, deepwater foundations, moorings and other offshore structures.With its single-lift capability catering to larger integrated structures than previously possible, Heerema said that Sleipnir will minimise offshore assembly work and raise operational efficiencies to new levels, while not compromising the flexibility and robustness of traditional installation methodologies.The vessel also comes equipped with dual-fuel engines and will run on marine gasoil (MGO) and LNG. It also boasts an IMO and US Coast Guard-approved ballast water management system, enabling it to work across all jurisdictions.Heerema said that it has already secured contracts to deploy the vessel in various offshore energy developments, including: Leviathan topsides installation in the Mediterranean Sea; Tyra jackets and topsides installation and removal in the Danish North Sea; Brae B jackets and topsides removal in the UK North Sea; as well as transportation and installation of the Hollandse Kust Zuid (HKZ) Alpha HVAC platform in the North Sea, off the Netherlands coast.Furthermore, Heerema said the semi-submersible crane vessel is well placed to handle the next generation of offshore wind energy components.Industry firsts for Sleipnir“Sleipnir scores several firsts in the industry,” said Pieter Heerema, chairman of the board at Heerema Marine Contractors. “It is the largest crane vessel yet built; it has the strongest pair of revolving cranes; and it’s also the world’s first crane vessel with dual-fuel engines running on MGO and LNG, dramatically reducing harmful emissions. Sleipnir’s innovative capabilities will place Heerema even firmer at the forefront of developments in the offshore oil, gas and wind energy industry for both installations and decommissioning.”The vessel will leave for sea trials shortly and is scheduled for delivery to Heerema soon afterwards.hmc.heerema.com
CEO of VF Inc. Dr. Valda HenryOver one hundred, sixty-five young people are gathered at the Windsor Park Stadium to participate in the VF Inc’s Youth series 2012 under the theme “Empowering Our Youth for a Better Future”.Some of the objectives of this youth series are to develop self-esteem and self-confidence, assist the youth in discerning their life purpose, provide strategies for coping with peer pressure and prepare the youth for the work place.At Monday’s opening ceremony VF Inc’s Chief Executive Officer, Dr Valda Henry explained that her company strongly believes that the youth are the future of Dominica and the society should be armed with the necessary skills needed to perform at their full potential.“We firmly believe that there is much goodness in young people and that we need to empower and guide our youth to ensure that they make wise decisions even in their youth, so that they can be prepared for the leadership tomorrow. We believe that we have to prepare them with the skills needed to navigate the future, skills that they will need to be role models for themselves, their peers and society on a whole”.Youth Series 2012 perticipants“We will focus on building health relationships and starting with the family, because we firmly believe that the family is the foundation from which all things rise. If we have strong families we will have strong societies and if we have a strong society then there will be a strong and better world, a better future”.The participants will explore a number of topics including “mapping our communities”.“If we have to start with the family we have to start with our sense of identity and where best but to go back to where we came from to understand our history, so that we can work with our present and prepare for a better future,” Dr Henry noted.The series will also aim to eradicate the misconception among the youth, teach them about sex and sexuality by arming the older participant’s with knowledge on “sex and self-worth”.The youth series will climax on July 28th, 2012.Dominica Vibes News LocalNews Youth series 2012 to focus on “building healthy relationships” by: – July 23, 2012 Tweet 22 Views one comment Share Share Sharing is caring! Share
Farmington Hills Police say two older children walking home from a bus stop Monday said a driver got out of his car and took photos of them with his cell phone.According to a department press release, the incident happened in the area of Parkhill Street and Orchard Lake Road, in a neighborhood between 12 Mile and 13 Mile Roads. The children ran home; the driver did not speak with or touch them.The driver was described as a white man in his 40s, with brown hair, a beard, and a large scar on the side of his face near his right eye. He was wearing a long-sleeved, black t-shirt and driving a white, newer model sport utility vehicle (SUV), possibly a Ford.“Detectives are actively investigating this report, and officers are conducting increased patrols in the area,” the release noted. There are no reports of any similar incidents.Anyone with information is asked to call Farmington Hills Police, 248-871-2610. Reported by Farmington Voice Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)