COVID-19: IRS Issues Favorable Guidance Addressing Certain Risks of Paycheck Protection Program Loans in M&A Transactions

On November 20, 2020, Cravath published a resource entitled “IRS Issues Favorable Guidance Addressing Certain Risks of Paycheck Protection Program Loans in M&A Transactions,” which summarizes recent informal guidance issued by the Internal Revenue Service (IRS) addressing a potential obstacle to M&A transactions between companies benefitting from different forms of relief under the CARES Act. The resource concludes that, as a result of the new guidance, a buyer will not lose eligibility for the Employee Retention Credit (ERC) as a result of acquiring a target that has received a loan under the Paycheck Protection Program (PPP).
 
Please click here to read the resource.