COVID-19: Paycheck Protection Program Loans May Lead to Unanticipated Costs in Certain M&A Transactions

On May 29, 2020, Cravath prepared a resource for clients entitled “Paycheck Protection Program Loans May Lead to Unanticipated Costs in Certain M&A Transactions,” which reviews how two mutually exclusive programs under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)—the Paycheck Protection Program and the Employee Retention Credit—may present the risk of lost tax credits to a buyer and its subsidiaries if they are involved in an M&A transaction in which the buyer has received one benefit, and the acquisition target another. The resource encourages companies considering M&A transactions to take into account the interplay between the two programs early during review of a potential deal.

Please click here to read the resource.