Tools You Can Use to Proactively Address to the Coronavirus Economic Shutdown
Today, New Mexico Governor, Michelle Lujan-Gresham, issued “stay at home instructions.” It’s short of martial law, but she does make the point that she has the right to “instruct” New Mexico residents to do this unless they are involved in essential activities.
While this unprecedented shutdown of the economy may be necessary to ensure essential services—the governor painted a picture of the possibility of not enough healthy people to perform essential services if the virus is not controlled—it is creating havoc for small business owners and their employees, families, suppliers and customers.
Seth Gardenswartz and Candice Lee Owens, partners at Blackgarden Law, provided insightful, practical and valuable information to New Mexico Restaurant Association members at a webinar today on small business disaster response tools. They discussed “Force Majeure” clauses, Business Interruption Insurance and Negotiation.
We are all feeling our way through this crisis, but the information contained in this blog may help you make and execute plans to protect your business and yourselves: https://www.blackgardenlaw.com/blackgarden-blog/2020/3/18/3-small-business-disaster-response-tools
Note: there were two areas mentioned in the discussion, that were not highlighted in the blog. I think they are both important to consider.
The first has to do with negotiation with landlords, vendors and service providers. If I understood correctly (and I am not a lawyer and cannot give legal advice), beginning a conversation by saying “I’m not going to pay you” may create an event of default, which could snowball into a lot of unpleasantness. If you need to negotiate less onerous payment conditions—short term or long term--than those spelled out in a contract, consult your legal counsel first and make a plan for negotiations, not ultimatums.
The second has to do with facing financial difficulties realistically. Particularly when you as the owner have made personal guarantees to back up the business, if you see things are getting really bad, stop the bleeding sooner rather than later with the help of your legal and accounting advisors. Protect your personal and business assets by getting relief while there are still assets to protect, not after you have burned through them.
Be well. Be prosperous. We New Mexicans are resilient and will get through this crisis. Now is the time to take deep breaths, relax, and be kind to each other as we navigate our business planning and recovery.
Associate Real Estate Broker and Certified Business Broker