PUBLISHED ON: March 20, 2020
In my last column two weeks ago – "How to Survive the Coronavirus and Keep Your Startup Alive" – I suggested that companies take steps to position themselves for the coming storm. Chief among these was sending their employees home (which is now law in New York), cutting their burn rate, reviewing their insurance policies and re-structuring their contracts where appropriate.
Businesses in the hospitality industry in particular have put such emergency plans into effect. If you are a restaurant owner in New York City, extreme measures are necessary to deal with a truly unprecedented 100 percent, near-instantaneous drop in demand. “Social distancing” emergency orders continue to be handed down by governors all over the U.S. including in New York, Connecticut, New Jersey and Pennsylvania.
Even if you’re not a restaurant, the ban on utilizing office space will almost certainly take a hunk out of your business – see, for example, New York and its statewide edict that businesses must keep at least 50 percent of their workforces at home. Of course, the U.S. is much larger than just New York, but New York may be where the rest of the country is headed if we don’t get this outbreak under control.
See also: Preston Byrne: How to Survive the Coronavirus and Keep Your Startup Alive
Businesses affected by local, state or federal emergency orders have a variety of mechanisms available to them if this emergency materially interferes with their contracts. Businesses that are suffering disastrous losses as a result of the virus have an obligation to take swift action to work with their contracting parties – for example, landlords or event organizers – to stanch the bleeding and reduce their burn rate in the face of what could be the single most disastrous macroeconomic event in history…..
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