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Coronavirus Special Coverage

Proceeding as Planned

Gene Cassidy

Even if the fair goes on as scheduled, Gene Cassidy says, crowd counts could be way down.

Gene Cassidy likes to say those at the Big E ‘manufacture’ the 17-day annual fair that is by far the biggest single event on the region’s calendar.

“It’s like putting an automobile together,” he told BusinessWest. “You really can’t cut components out and expect the vehicle to run; it costs ‘X’ number of dollars to produce the fair, and we’re still going to spend that — we have to produce a fair that people are going to want to come to.”

And so, those planning the 2020 edition of the Big E are proceeding with the mindset of including all the parts that typically go into the Big E, despite the COVID-19 pandemic that is currently decimating the local economy and wiping events off the calendar in wholesale fashion.

But while Cassidy is currently certain there will be a Big E — that’s currently — he’s less certain about a great many other things. Perhaps most importantly, he doesn’t know how many people will come to the fairgrounds this September. He quoted at least one poll showing that 50% of respondents said they would not let the pandemic impact their decision to attend an event like the Big E, but another 40% said they wouldn’t attend such an event unless there was a vaccine for the virus.

And if attendance is down 20%, 30%, or even 40%? “It’s going to be a heavy lift to overcome that, but we can’t afford not to go forward.”

And if the fair should have to be canceled? That has happened a few times during the history of the fair — during World Wars I and II, to be specific — but Cassidy isn’t thinking in those terms, because the economic hit would be extremely difficult to absorb.

“I don’t want to say we’d close, but it would be a difficult, heavy lift to figure out how we would sustain ourselves so we could reopen in the future,” he told BusinessWest, adding that such a decision won’t have to be made for some time, and he is obviously hoping, and projecting, that enough progress can be made that he won’t have to take that course.

“I have confidence that we’re going to learn from this bug faster than we’ve learned from anything in the past,” he said. “And I have confidence that, by the time we get to the summer, things are going to start to loosen up; we’ve learned a lot, and we’re going to learn a great deal more — and we will open.”

As he talked about this fall’s Big E and the prospects for it, Cassidy joked that, for a change, the ongoing reconstruction of the Morgan-Sullivan Bridge, which links West and Agawam and abuts the Big E property, will not be the main topic of conversation this summer and fall.

It will still be a topic — two lanes will be closed until late summer 2021, according to the current schedule — but certainly not the topic.

“I don’t want to say we’d close, but it would be a difficult, heavy lift to figure out how we would sustain ourselves so we could reopen in the future.”

Indeed, the bridge is now largely an afterthought as the Big E and the region cope with the global pandemic and questions about both the short term and the long term that simply cannot be answered.

Already, the virus has had a huge impact on the Big E, as it has on any venue that hosts large gatherings. Searching his memory banks — and it was hard to remember back that far because so much has happened, or not happened, as the case may be — Cassidy said the last event event staged at the Big E was an antique and crafts show on March 7 and 8.

Everything since has been wiped off the calendar, including the huge home show scheduled for late in March and the planned Hooplandia, a 3-on-3 basketball festival slated to make its much-awaited debut in June.

Everything is cancelled or postponed through June, he went on, adding that he was not aware of any cancellations for July at this time. Aside from the basketball tournament, this summer was to be dominated by a number of horse shows and a few other gatherings.

But most of the attention has now shifted to the fair, which annually attracts more than 1 million people to the region and contributes more than a quarter-billion dollars to the local economy. At this point in time, the expectation is that the show will go on, said Cassidy, adding that adjustments can and will be made to help maintain the safety of visitors and employees alike.

These will come in such realms as ticketing and accessing the property, he said, adding quickly that, given the nature of fairs — putting a lot of people in very close proximity to one another as they do everything from ride on rides to eat fried dough to watch concerts — there isn’t much more that can be done to facilitate social distancing.

“The fact is … a fair is not the place where you can enforce social distancing,” he said. “We can be suggestive, but that’s not what a fair is. It’s uniquely the American way of life, and it just doesn’t lend itself to social distancing.”

These sentiments explain why there are questions — and concerns — about just how many people will make that pilgrimage to West Springfield this fall, and how many times they’ll make it.

“Citizens are going to decide how close they want to be to other people,” said Cassidy. “And I suspect that there’s a segment of society that may never return to a fair again.”

For now, those planning the fair are proceeding to ‘manufacture’ a fair like those that have come before it — but with some adjustments for the pandemic, obviously.

“We’re building a comprehensive plan for cleaning and disinfecting,” he told BusinessWest, adding that, given the fact that the Big E is an agricultural fair, it has rigorous policies in place for disinfecting the various facilities on the grounds.

Other changes will come with ticketing — there will be print-at-home ticketing, for example — as well as with access to the grounds in an effort to create some distance between people. Employees will wear masks and gloves, and visitors will be wearing masks as well, he said.

As for planning for the fair, it is, in most all respects, right on schedule.

“We’re going at the same speed as we always do,” Cassidy noted. “All the entertainment is booked; the concessionaires are lined up, although many of them are not working currently, and and I hope they can make to September. We’re going full-speed ahead — at this point, the fair is more than 90% ready to go.”

And, as noted earlier, it has all the components that the fairs have had in recent years.

“It costs us about $20 million to run the fair, and we hope to gross about $23 million or $24 million from the fair’s operation,” Cassidy noted. “We can’t produce an event that’s compromised, because people won’t come back.”

That said, one of his biggest concerns moving forward is the massive workforce needed to put on the fair, and the generational nature of that workforce.

“We have grandparents, parents, and grandchildren, all of whom participate in the workforce,” he explained. “And we have hundreds of people who volunteer at the Eastern States, many of whom are over age 65. My job is to protect my 65-year-old as well as any patrons who are in that demographic. That’s what our plan is focused on — how do we protect people who are most vulnerable?”

—George O’Brien

Coronavirus Special Coverage

For Many Impacted by the Pandemic, It Might Be a Viable Option

By Michael B. Katz, Esq.

One thing I’ve learned in my 45 years practicing bankruptcy law is that most individuals who wind up taking this course of action are good people who have found themselves in bad and unexpected circumstances, most often caused by things that were beyond their control.

People get sick, get divorced, lose employment, and have accidents. Likewise, businesses can be adversely affected by events over which they have no meaningful control. Outbreaks of disease, oil shortages, breaks in the supply chain, changing technology, interruption of their workforce, and many other factors can all cause a business or individual to be unable to stay financially afloat.

Which brings us the COVID-19 pandemic. It represents the epitome of unexpected circumstances and matters beyond our control. Indeed, in an effort to slow the spread the spread of the virus, the state has shuttered all non-essential businesses, leading to unemployment levels not seen since the Great Depression.

In these precarious times, individuals and businesses are finding themselves in dire financial circumstances they could not have foreseen, nor done anything to prevent. Given their predicament, some might be looking at bankruptcy as a possible recourse.

In order to help honest but financially burdened individuals make a fresh financial start, Congress has passed a number of bankruptcy laws. Here are the key types:

 

Chapter 7

This is the type of bankruptcy proceeding that allows certain qualifying individuals to eliminate most of their unsecured debts (those without mortgages) and to make a fresh financial start.

In order to qualify for Chapter 7, a person cannot have filed Chapter 7 bankruptcy within the prior eight years. The person filing, known as a debtor, must also pass a test which limits how much earned income the debtor had earned in the prior year. This is called the means test, and it varies based on the state in which the debtor resides, the number of dependents in the family, and whether there is any earned income generated by the debtor’s spouse.

For example, for a Massachusetts resident, the limitation is $67,119 for a single person, $84,125 for a couple (combined gross income), and then increases in different amounts for additional dependents. These limitations became effective as of April 1, 2020 and are subject to periodic adjustment. Similarly, in Connecticut, the individual cutoff is $66,689, and $88,594 for a couple.

Michael B. Katz

Michael B. Katz

In these precarious times, individuals and businesses are finding themselves in dire financial circumstances they could not have foreseen, nor done anything to prevent. Given their predicament, some might be looking at bankruptcy as a possible recourse.

While most unsecured debts can be eliminated in Chapter 7, there are some types of debts that cannot, including income taxes owed from the past three years, alimony and child support, student loans, and debts incurred due to an accident while driving under the influence. 

One of the major benefits of Chapter 7 for an individual obtaining a discharge is that not only are the debts — such as most credit cards, personal loans, foreclosure and repossession deficiency balances, and medical bills — totally wiped out, they are eliminated without incurring any phantom income, on which both federal and state income taxes would be owed.

Compare this to either making a direct settlement with a lender or credit-card company, or going through a non-judicial, multi-year debt-settlement plan, where anything that is settled with the creditors results in the person receiving a 1099 from the creditor and having to pay taxes on the forgiven portion of the debts. In Chapter 7, Congress has decreed that all discharged debts are tax-free, and therefore no hidden taxes are incurred.

The key aspect of Chapter 7 is that the Bankruptcy Court is trying to help an honest debtor make a fresh financial start. In regard to secured debts — for example, those debts that are secured by a lien or mortgage, most often vehicle loans or a home mortgage — in Chapter 7, the debtor gets to select whether they wish to keep the item and continue making the payments, or to surrender the item and wipe out any shortfall amount that might exist after the secured party sells the item after repossession or foreclosure sale.

While a corporate entity can also elect to file Chapter 7 and have the Bankruptcy Court liquidate its assets and distribute the proceeds to its creditors, it does not get to carry on its business affairs after filing. Only an individual qualifies for a discharge, so a corporate entity must cease all business after it files Chapter 7.

 

Chapter 13

In this type of proceeding, an individual is given an option to repay all or a portion of the debt, if approved by the Bankruptcy Court and Chapter 13 trustee, through a plan of reorganization that generally lasts for a period of three to no more than five years. There is no need to pass the means test to qualify for Chapter 13, and, unlike the restrictions in Chapter 7 that allow it to include only unsecured debts, Chapter 13 can also affect secured debts.

The most common application in Chapter 13 is to use it to stop a foreclosure sale of a debtor’s home or automobile, and it allows the debtor to pay the outstanding past-due amounts over the life of the plan, in addition to requiring the debtor to make the full current payment each month. 

For example, if a lender is owed $60,000 in back mortgage payments, requiring the borrower to pay it in full in order to prevent a foreclosure sale, in a Chapter 13, the debtor could propose to pay $1,000 per month for the 60 months of its Chapter 13 plan, plus pay the current mortgage amount each month so that debtor does not fall further behind. 

These are simplified examples, and the details of a Chapter 13 plan are more complex and would require you to consult with a qualified attorney for more specific advice.

 

Chapter 11

A Chapter 11 reorganization can be filed by an individual who owns a business and operates as a ‘DBA,’ but due to its complexity and expense, it is most often filed by a corporate entity.

The idea of a Chapter 11 is to grant the business a ‘time out’ and give it some element of time to figure out a plan of reorganization to allow it to continue in business. Under 11 USC 362(d), all lawsuits and claims against the debtor’s business are enjoined from proceeding, and the debtor gets time to meet with its creditors and to seek to formulate a formal plan of reorganization.

That plan may propose to pay unsecured creditors a percentage on the dollar, which must be found to be a greater percentage than the creditors would receive in an immediate liquidation of the business and its assets. In some cases, mortgage debts can be reduced to the actual value of the assets that secure the mortgage, so that if the debtor owes a lender $750,000 on a building that can be proven to be worth only $500,000, the debtor can seek to ‘cram down’ the mortgage to a reduced amount of $500,000, and the additional $250,000 gets treated as an unsecured debt, and paid at the same percentage on the dollar as the other unsecured debts.

This is a very simplified version of a Chapter 11, as there are many other requirements that must be fulfilled by a Chapter 11 debtor, and the cases are necessarily complex and sometimes expensive. However, the overall savings to the debtor can be substantial, and they are often the key to a business’ survival.

The court in a Chapter 11 is seeking to be fair to both the debtor and its creditors, as well as preserving the jobs of the employees of a business.

 

Non-bankruptcy Alternatives

There are sometimes options for a business to consider without the need to file a formal insolvency proceeding. They require a skilled and knowledgeable attorney to know how to handle these matters, and they include utilization under Massachusetts state law of an assignment for the benefit of creditors, trust mortgage, or sometimes just using a skilled negotiator to try to convince creditors to accept an informal settlement of their debt, rather than forcing the debtor to use funds to pay for a formal bankruptcy proceeding, when those same funds could be paid toward a voluntary settlement with the creditors. 

In reality, these voluntary settlements are often difficult to finalize because you need to negotiate with multiple parties, who sometimes will not agree to the same terms. In a Chapter 11, the creditors are legally required to accept whatever settlement is approved by the bankruptcy judge, after a plan is voted on and approved by the Bankruptcy Court.

It is important that you not let your pride prevent you from finding the best and most effective solution for your personal or business cash-flow problems. You cannot make an informed decision until you know and understand all of your options, as well as the positives and negatives of each option.

During this pandemic, many fraudulent parties are preying on people, so make sure to do your homework to get the name of a qualified person to advise you or your business. Contact the Hampden County Bar Assoc. Lawyer Referral Service, call your accountant, or do a Google search to find an experienced person to help you or your business. 

Working together, we can all find ways get through these uncharted waters.

 

Michael Katz is the chairperson of the Bankruptcy & Creditors Rights department of the law firm Bacon Wilson, P.C., with offices in Springfield, Northampton, Amherst, Hadley, and Westfield; (413) 781-0560.

Coronavirus Sections Special Coverage

The New Math

Julie Quink noted that, at her accounting firm — as well as most others — it is tradition to have a large party on April 15, the tax-filing deadline, or perhaps the 16th.

Steve Erickson

Steve Erickson

Patrick Leary

Patrick Leary

Julie Quink

Julie Quink

Jim Barrett

Jim Barrett

These are celebrations of hard work well done, she told BusinessWest, adding that staff members who have been under a great deal of stress and working long hours and long weeks can take a deep breath and relax, knowing that the worst is over for another year.

This April 15, there was no party at Burkhart Pizzanelli, the firm she serves as managing partner, or at most other firms. And it’s not just because the filing deadline has been extended to July 15 by both the state and federal governments.

It’s because there is still a great deal of stress, and the long hours continue as accounting firms play a huge role in trying to help their clients get to the other side of the COVID-19 pandemic.

“On a personal level, I’ve probably never worked as hard in my entire career as I have this year,” she noted. “I’ve put in many more hours than I have other years, and I know others have as well.”

Quink was one of several area accounting-firm executives to speak with BusinessWest as part of the latest in a series of virtual roundtable discussions concerning COVID-19. Those at the ‘table’ said these are, quite obviously, different times for accountants. While some of the work hasn’t changed, like all those tax returns, some of it has, including efforts to help clients of all sizes and in virtually every sector file for disaster relief (especially through the Small Business Administration’s Paycheck Protection Program), and — now that the money has started coming in — properly manage those funds so that the loans granted are forgivable.

But the work goes well beyond helping clients fill out the necessary paperwork, said Steve Erickson, CPA, partner in charge of Whittlesey’s Holyoke office. He said clients need to carefully manage cash flow, and they also need plans for the short and long term as they address life during — and after — this pandemic, and his firm, like others, has stepped in to assist with this often-difficult work.

“The biggest concern we see is cash flow and advising clients on what’s coming down the pike and making good long-term plans for whatever they’re doing,” he told BusinessWest. “And each one of them is unique; I can’t say that there’s one that’s very similar to the other.”

Meanwhile, the manner in which work is being done is obviously changing as well. Many of those we spoke with are working at home — some or all of the time — while discussions with clients and co-workers are now done mostly by phone, e-mail, or Zoom. And since accountants are working with clients’ sensitive financial information while at home, proper protocols and security measures have been added.

There are lessons being learned. Summing up the comments offered, it seems that those in accounting work much more efficiently — and certainly communicate much better — when they’re together in the same office, sharing ideas and collaborating. As for clients … the remote meetings have worked well, for the most part, and they may be the preferred method moving forward.

“From a positive standpoint, this has shined a bit of a light on our firm as far as our processes, our policies, how we can do things better, and what we should be looking to do better, said Patrick Leary, CPA, a partner with Springfield-based MP CPAs. “Hopefully, we’re going to learn from this and everyone else will learn from this and make themselves a stronger firm.”

“The biggest concern we see is cash flow and advising clients on what’s coming down the pike and making good long-term plans for whatever they’re doing. And each one of them is unique; I can’t say that there’s one that’s very similar to the other.”

Overall, this has been, and will continue to be, an intriguing, challenging, and in most all ways rewarding time for accountants, said those at the virtual table. Clients are calling them — and leaning on them for help — like never before, and as a result, relationships are being strengthened, and new ones are being formed.

Jim Barrett, managing partner at Holyoke-based Meyers Brothers Kalicka, said that, for some time, his firm — and most all firms, for that matter — have been working to broaden the umbrella of services to clients and develop relationships that are more advisory and consultative in nature.

The pandemic has in some ways forced the issue.

“This crisis has spurred us to do more consultative and advisory work with clients, not only with navigating the stimulus package, but also navigating any changes in their business, be it with employees or costs,” Barrett explained, adding that this work is certainly ongoing and is likely to continue for some time.

Beyond the Numbers

All through her career, Quink told BusinessWest, she’s prided herself on having the answers when clients have questions.

She still has most of the answers, but COVID-19 has changed that equation as well, because now, the questions are, well, different — in many cases, much different.

“This is my 29th year doing this, and I can’t recall a time when I’ve said ‘I don’t know the answer to that’ as much as I have these past few months, and follow it up with ‘I’ll have to get back to you,’” she told BusinessWest, adding that, in many cases, the answers don’t come easily.

That’s because clients are asking about whether to furlough employees or lay them off; or about whether employees can be ordered back to work; or about how to handle a situation where a laid-off employee is making far more on unemployment than they would on the job — and, therefore, wants to stay laid off; or about what to do with employees who must stay on the payroll for the loan from the SBA to be forgivable, but have no work to do because the business can’t open yet because it’s not deemed ‘essential.’

“People who scrambled to apply for the loan as soon as they could for fear that the funds were going to run out are now starting to receive those proceeds, and they’re asking, ‘if I bring my employees back, what am I going to do with them?’” said Leary, noting that there are many types of businesses that fall into this category. “Do they paint the walls?

“If you’re a lower-wage earner, and you can make the same or more on employment, what’s the incentive to go back to work and help my employer have some of his loans forgiven?” he went on. “It’s a predicament that a lot of companies are facing, and we haven’t seen any real guidance on it.”

Coping with such questions is a new reality for accountants. Actually, it’s one of many new realities. And they all come on top of the oldest of realties — tax season.

Add it all up — pun intended — and this has been a very different start to the year for accountants. Things began as they generally do, with tax-return work starting to flow in during the winter months and building toward the annual late-March, early April crush. By mid-March, though, as the pandemic reached Western Mass., and especially after non-essential businesses were ordered closed on March 24, things changed dramatically.

Clients were suddenly thrust into a situation unlike anything they’d seen before, said Barrett, and they were calling their accountant in search of some answers and, more importantly, some guidance.

“There’s a lot of companies and medical practices who have never gone through this before, and they’re doing the appropriate thing … their financial people are going through their expenses, they’re going through what needs to be paid and what should be paid — basic business decisions that they’re trying to make under a period of duress,” said Barrett. “What we see is that either the company doesn’t have a financial person — it’s the owner asking us — or they do have a financial person, and that person is, for the most part, by themselves, and they’re looking for advice or just want to bounce their plan off someone to see that it makes sense.”

And as clients started calling with new and different needs, accountants were having to adjust to new ways to work.

Indeed, most have been working at home — another of those new realities that brings its own set of challenges — and thus communicating with clients and colleagues alike in ways other than face-to-face.

“We’ve instituted procedures and policies that we never had before because we’ve never had that many people working out of the office,” said Barrett, whose sentiments were echoed by others at the ‘table.’ “We’re still fine-tuning those moving forward, but it’s changing the way we work, without a doubt.”

Erickson agreed. He said Whittlesey closed its three offices on March 18 and went to remote access. Like everyone else who’s gone through it, he called it a learning experience.

“It was a little bumpy at first, just getting used to the whole thing and trying to stay out of the kitchen and all the snacks in there,” he noted. “But, overall, it’s gone smoothly.”

Quink noted that, while Burkhart Pizzanelli has closed its office to outside traffic, some staffers still come to the office most days, and carefully practice social distancing — while taking a number of other steps in the name of safety — while doing so.

“We’re not on top of each other; we have a nice layout so we can maintain the appropriate distance,” she explained. “At lunchtime, it might look like you’re looking at the royal family — there’s one on one end of the table and one at the other end, and we’re always going around and reminding each other about being safe and taking the steps to stay safe; we emphasize that, if one of us goes down, the entire firm is down.”

Forms and Function

But it’s the nature of the work, more than how it’s carried out, that has been the more dramatic, and impactful, change for accountants.

Much of it has involved filing for PPP relief and now helping clients carefully manage that money, but, as noted earlier, it goes well beyond that.

There are all those questions to answer, or try to answer, as the case may be, but there’s also the task of helping companies plan — something that’s very difficult to do in these times — for whatever might happen in the coming months.

“We have spent quite a bit of time with our corporate clients talking about cash-flow management and cash-flow projections,” said Leary. “We’re talking through ‘what-if’ scenarios with a range of clients that runs the gamut, from those in the cleaning-supply business who cannot get enough product in the door to those in the hospitality industry who have shuttered their doors.

“We’ve had some discussions with some distributors and manufacturers who are now being more cognizant of their suppliers and their inventory levels,” he went on, offering a specific example of the consultative work going on. “They’re looking at having redundant suppliers; instead of having just a West Coast supplier, they’re asking whether they should also have one from Canada or one in the Asia market. If borders get closed, do they have a redundant supplier, and what is the proper inventory level? There’s a lot of thoughtful planning going on.”

Erickson concurred, and noted that, while planning, clients of all sizes are grappling with the moment as well, and this means dealing with everything from cash flow to employment matters to discussions with the landlord and the bank about possible deferrals of payments.

Quink agreed and noted that, overall, there are important conversations to be had with clients. And while some of them, especially those with the cleaning companies that have more work than they can handle, are upbeat in nature, most are exactly the opposite.

“We’re having a lot of strategy conversations with clients, and the reality is that some of the clients we’re taking to … we know they’re not going to make it through this,” she said. “So we’re having the best conversations we can to position them so that when that happens — if it happens — they’re at least well-advised.”

While it’s difficult to see any silver linings to the current crisis situation, the accountants at the ‘table’ said they can find some in the way that clients are looking to learn from what’s happened and take steps to not only survive the pandemic but be a better, stronger company for the future.

“There are a lot of people proactively planning for the long term,” Leary said. “And to me, that’s positive; they’re not making impulsive decisions and thinking that this is going to close their doors permanently. It’s more, ‘when we come out of this, how do we do it better?’ And that’s encouraging.”

As for the accounting firms themselves, they’re dealing with the moment themselves, and it’s a challenging time. Most of the consulting work mentioned above is provided at the upper levels, by the partners, who, at the same time, are trying to manage younger staff members, many of them working remotely.

“We’re trying to juggle two things at once, and we’re frustrated that we can’t teach as much, and it’s difficult to manage younger people at home,” Barrett said. “Meanwhile, there’s that thought in the back of our minds … ‘boy, I hope we get paid for this.’”

Indeed, while firms are eager to help, they are advising clients knowing that the bills for their services may wind up at or near the bottom of the pile of those that get paid. Such fears are the basis for comments shared by many at the table that, while this will be a busy year, it may not be a good one when it comes to the bottom line.

This is just one of many stress-inducing matters to contend with during a year that will be unlike any other for the accounting firms in the region.

“The toll that this pandemic has taken on our team from the mental perspective is enormous,” said Quink. “It not just how it’s extended the season, but how it’s added a lot to our workloads.”

Bottom Line

Getting back to the annual April 15 celebration … Quink told BusinessWest there might be a party on July 15, when tax returns are now due. But maybe not.

Tax season will be over, but the work of helping clients navigate their way through COVID-19-generated whitewater will be ongoing.

That’s part of the new reality for accountants, and it will become the status quo for the foreseeable future. It will be a challenging time in many different respects, and one that gives new meaning to the phrase ‘taxing situation.’

George O’Brien can be reached at [email protected]

Coronavirus

The Bottom Line

By Michael A. Fenton, Esq. and Mark J. Esposito, Esq.

The COVID-19 pandemic has touched the lives of billions across the globe. In Massachusetts, Gov. Charlie Baker recently extended an emergency order directing that all non-essential businesses cease in-person operations and banning large gatherings.

Michael A. Fenton, Esq.

Michael A. Fenton, Esq.

Mark J. Esposito, Esq.

Mark J. Esposito, Esq.

With each closure, cancellation, or indefinite postponement comes a flurry of legal questions pertaining to contract law. Indeed, the postponement of the comic-book convention scheduled to take place in Boston in March has already resulted in a lawsuit stemming from a disagreement over a contract.

This article focuses on how contracting parties may be excused from certain obligations due to COVID-19.

To a great extent, businesses are in uncharted waters. The last comparable public-health emergency occurred more than 100 years ago: the Spanish Flu of 1918-19. Partly as a result of that rarity, instructive legal precedents are also few and far between. In these unprecedented times, the often-overlooked doctrine of impossibility of contract and the underlying legal concept of force majeure are positioned to play primary roles in the interpretation of contracts during the coming weeks and months.

Doctrine of Impossibility of Contract

The doctrine of impossibility of contract may be raised as a defense in response to a lawsuit seeking to enforce a contract. Under the legal theory, if both parties entered into the contract assuming that a certain state of facts would continue to exist, and that assumption turned out to be wrong, without the fault of either party, the obligation to perform under the contract would be excused (Chase Precast Corp. v. John J. Paonessa Co. Inc., 409 Mass. 371, 373 [1991]). While the doctrine of impossibility of contract may be (somewhat) succinctly summarized, it is not necessarily so easy to interpret in practice.

The circumstances triggering the doctrine of impossibility need not be written into an agreement in order for the doctrine to apply. However, the applicability of the legal theory can be expressed in a contract through what is called a force majeure clause.

Force Majeure

Black’s Law Dictionary defines force majeure as “an event or effect that can be neither anticipated nor controlled; esp., an unexpected event that prevents someone from doing or completing something that he or she had agreed or officially planned to do. The term includes both acts of nature (e.g., floods and hurricanes) and acts of people (e.g., riots, strikes, and wars).” Force majeure intersects with the doctrine of impossibility when a contract cannot be performed as intended because of a war, natural disaster, or the like.

The general definition of force majeure can be customized in an individual contract. Each contract should be reviewed carefully to determine how force majeure is defined, if at all, and to assess whether the current pandemic circumstances preclude enforcement of the contract obligations.

Force majeure clauses are clearly implicated if they explicitly include pandemics or public-health crises within the contractual definition, but what about less obvious situations? Does the COVID-19 crisis qualify as an unanticipated, uncontrolled ‘act of nature’ or ‘act of people’? The pandemic certainly is an unexpected event that is preventing a great many people from doing or completing a great many things. But an insurer being sued in Louisiana disagrees.

Which Applies?

In the midst of the current health crisis, parties with (and some without) a force majeure clause in their agreements find themselves wondering if the doctrine of impossibility of contract applies. Is a commercial tenant required to continue to pay rent to a landlord, when the leased premises have been ordered closed by the governor because of a public-health emergency? What rights does the landlord have in the same situation? Surely the tenant anticipated that it would be able to operate its business out of the space; otherwise, there would have been no reason to rent it. What specifically did the parties think at the time that they entered the agreement?

The general definition of force majeure can be customized in an individual contract. Each contract should be reviewed carefully to determine how force majeure is defined, if at all, and to assess whether the current pandemic circumstances preclude enforcement of the contract obligations.

The general definition of force majeure can be customized in an individual contract. Each contract should be reviewed carefully to determine how force majeure is defined, if at all, and to assess whether the current pandemic circumstances preclude enforcement of the contract obligations.

If the doctrine of impossibility of contract applies, whether through the express provisions of a force majeure clause or otherwise, contracting parties must determine what obligations are excused and to what extent. Most contracts will not be completely invalidated by a force majeure event. Rather, force majeure will operate to relax certain obligations based on the facts and circumstances (e.g., extending deadlines, waiving mandatory production requirements, abating rent, or other payments owed).

It is worth noting that many commercial leases have provisions that expressly define what qualifies as force majeure and narrowly enumerate what obligations can be excused under it. Many commercial leases state plainly that the tenant’s obligation to pay rent cannot be excused by triggering the force majeure provisions. Where losses are realized as a result of the doctrine of impossibility of contract and/or force majeure provisions in a contract, an aggrieved party might reasonably consult with their insurance carrier as business interruption insurance could conceivably be a useful tool in mitigating these losses. Unfortunately, insurance companies are almost uniformly denying such claims.

Uncertain Times

The COVID-19 pandemic has turned our lives upside down. While contractual obligations are the last thing many of us want to be thinking about during this time, it is an undeniable truth that business and professional obligations are on the minds of many as we struggle to honor our commitments. For some, the doctrine of impossibility of contract and force majeure contractual provisions may provide some measure of relief from obligations, while it will only further compound the damage for others who seek to enforce such obligations.

Michael A. Fenton, Esq. and Mark J. Esposito, Esq. are attorneys at Shatz, Schwartz and Fentin, P.C., and specialize in business and estate planning, commercial and tax-exempt bond financing, real estate, litigation, and bankruptcy; (413) 737-1131; ssfpc.com

Estate Planning

Signs of the Times

Hyman Darling says the calls started coming in several weeks ago.

At first, there were a few, and then, as the news about the COVID-19 pandemic became steadily worse and the grim reality of the situation became ever more apparent, the volume started increasing.

On the other end of the line were people looking to update a will or estate plan, or, more likely, finish the one they’d started but never finished or finally get started with one, he said, adding that there are obvious reasons why.

“Everyone knows someone who knows someone who has the virus, and they’re worried — about their parents, their brothers, their cousins … somebody,” said Darling, a partner with the Springfield-based law firm Bacon Wilson and one of the region’s pre-eminent estate-planning specialists. “And there’s more people sitting at home with less to do; they’re paying attention to this and thinking about it. The news is very distressing, and people are responding to it.”

Meanwhile, healthcare workers, and especially those on the front lines of the crisis, don’t have to watch on TV — they can see it right in from them — and, thus, they’re responsible for many of these calls to Darling and specialists like him across the area.

This phenomenon, if it can be called that, is certainly keeping area estate planners much busier than they were, providing some much-needed peace of mind to those who are watching the news and seeing the death tolls rise, and even adding some new phrases to the lexicon, like ‘driveway signing.’

Hyman Darling

Hyman Darling

“Everyone knows someone who knows someone who has the virus, and they’re worried — about their parents, their brothers, their cousins … somebody. And there’s more people sitting at home with less to do; they’re paying attention to this and thinking about it. The news is very distressing, and people are responding to it.”

That’s the phrase Liz Sillin, an estate-planning specialist with Springfield-based Bulkley Richardson, summoned as she talked about one of the more challenging aspects of this development: documents need to be signed and notarized, and at this moment (things may well change), Massachusetts does not allow electronic signatures for such documents as wills and healthcare proxies.

That’s why there really are signings in the driveway — and with all the proper precautions taken for preventing or at least minimizing the spread of the virus.

“We take as many steps as possible to keep us all away from one another and not cross-contaminate the paper,” said Sillin, who has now been part of a few of these elaborate exercises, which involve the lawyers and four participants — the party creating the document, two witnesses, and a notary. “Everyone brings their own pen, and everyone steps back while one person signs, preferably without touching the paper with his or her hand. We use lots of hand sanitizer; we use a clipboard, and we sanitize the clipboard. It’s kind of a bizarre process, but there are people for whom getting these documents done is paramount, and if remote signing isn’t legal, this is the only way we can do it.”

Liz Sillin

Liz Sillin

“Everyone brings their own pen, and everyone steps back while one person signs, preferably without touching the paper with his or her hand. We use lots of hand sanitizer; we use a clipboard, and we sanitize the clipboard. It’s kind of a bizarre process, but there are people for whom getting these documents done is paramount, and if remote signing isn’t legal, this is the only way we can do it.”

Mike Simolo, an estate-planning specialist with Springfield-based Robinson Donovan, who, like most all of his counterparts, has taken part in a few driveway signings himself, agreed. And, like others we spoke with, he said that, while it’s unfortunate that it took a pandemic to get people to do what they should have some time ago, he’s glad that many have been motivated to get this important work done.

“People who had been putting this off for one reason or another are suddenly deciding not to put it off anymore,” he said. “They’re calling up, hoping to get a plan a plan in place sooner, rather than later.”

With the accent on sooner.

And while their phones are ringing more often, those we spoke with noted that they are apprehensive that some, in an effort to get something done, and in a hurry, will take shortcuts, perhaps visit one of the legal websites out there, or, worse still, take the DIY route.

“This is LegalZoom’s dream situation,” said Simolo, referring to the popular website that provides legal assistance. “People are waking up, watching the news, and realizing, ‘I don’t have anything.’”

He said that, while people can certainly take that route, he projects that many who do will leave out something or make a mistake that could have serious implications later, when loved ones are left to settle an estate (more on that later).

Mike Simolo

Mike Simolo

“People who had been putting this off for one reason or another are suddenly deciding not to put it off anymore. They’re calling up, hoping to get a plan in place sooner, rather than later. ”

For this issue and its focus on estate planning, BusinessWest looks at how the COVID-19 pandemic is prompting many to get important estate-planning work done, and how the legal community is responding.

Where There’s a Will…

As she talked about her greater workload and when and why it came about, Gina Barry, another partner and estate-planning specialist with Bacon Wilson, used the story of a pharmacist at one of the local hospitals — an individual with a number of the health risks that make him especially vulnerable to the virus — to touch on a number of the relevant points in this intriguing development.

“He’s working long hours in the hospital,” she said, “and he was terrified — and he probably still is — that, because of his high-risk concerns, he would be one of those who would contract the virus and not survive it.

“We started his plan a few years back,” she went on. “Recently, he e-mailed me and said, ‘I have no right to ask this, given that I delayed a bit, but can you rush?’ And I said, ‘absolutely, I can rush.’ I dropped everything and got it done.”

Continuing that story, Barry said this individual managed to get the notary from the hospital and two of his co-workers together to sign these documents, and she Zoomed in for the gathering to make sure everyone was signing in the right place.

As noted, this anecdote touches on a number of the many elements of this story, from the fear exhibited by healthcare workers to the need to move fast; from the logistics involved with getting a signing done to the technology used by lawyers to get the documents signed, sealed, and delivered.

And it’s a story that is now playing itself out countless times across the region.

Indeed, while not everyone calling to write or update a will or a related document is in healthcare — and the lawyers we spoke with said these individuals have been given first priority — most everyone is terrified. And they’re also in a hurry.

And, for the most part, estate-planning specialists are able to accommodate them.

Simolo said a process that might normally take several weeks can be expedited and handled in perhaps a week to 10 days, with a fairly simple will being done in just a few days.

Meanwhile, many of these wills and other documents — living wills and healthcare proxies are also being sought — are being created in what would be considered non-traditional ways. Indeed, since face-to-face meetings are all but out given new social-distancing guidelines, estate-planning specialists are using the phone, Zoom, and other vehicles for communicating with clients and getting documents reviewed.

“People don’t care about coming in now,” said Darling. “They’re happy to do the telephone messaging, e-mails, Zoom … as long as it gets done, they don’t care if they meet us in person.”

Interest in getting documents written and notarized is especially acute among those in healthcare, and often it’s those individuals’ loved ones who are getting the ball rolling.

“I’ve been contacted by the husbands and wives of doctors,” Simolo said. “They’re saying, ‘let’s get this done as soon as humanly possible.”

Sillin agreed, and noted that there is interest among those old and young to have their affairs in order.

“Just today, I got a call from someone who is a doctor — he’s very young and has a young family,” she explained. “He’s in a facility that has cases around him, and he’s like, ‘yikes, I have to do something.”

But interest is across the board, said those we spoke with, adding that some of those calling are finally getting around to having these documents written, while others are realizing that the ones they have are dated and need to be made current.

“People are at home reading about nothing but COVID-19,” said Sillin. “They begin to contemplate this aspect of life, and we’ve been getting a lot of calls from people of all ages who want to get going on some estate planning.”

Simolo agreed.

“It’s mostly been people who don’t have a plan in place or had a plan in place 25 years ago, when the kids were 3,” said Simolo. “Now, the grandkids are 3 — that kind of thing.”

But while those we spoke with are certainly pleased that their phones are ringing more — for themselves, but especially for their clients — they are concerned that many may try to do this work online or even draft something themselves.

“It’s been my experience that, nine times out of 10, something’s missing from those documents,” said Darling, adding that, in many other cases, documents are not signed properly. “You get what you pay for, and mistakes made now can be very costly later — not for the deceased, but for their loved ones; litigation is very expensive in a will contest, not to mention the emotional stress that it brings on family members.”

Barry agreed and summoned an analogy she’s used many times during her career — too many to count by her estimate — when talking about do-it-yourself wills and related documents.

“You can pull your own tooth, too,” she said. “But would you rather visit a dentist or tie a string to a doorknob and try it that way?”

Peace of Mind

Finishing her story about the pharmacist in one of the local hospitals, Barry said that, at the conclusion of the signing — which, again, she witnessed via Zoom — she asked her client if he now had some peace of mind.

“He signed, and his shoulders must have dropped like four inches visibly,” she told BusinessWest. “They were up around his ears, and he just relaxed and dropped his shoulders. And I said to myself, ‘this is why we’re doing this.’”

And doing a lot of this.

There aren’t very many bright spots to be found in the midst of this pandemic, but this is clearly one of them. People across the region are becoming proactive and getting needed documents in place.

And that’s allowing many more people to sigh, relax, and drop their shoulders.

George O’Brien can be reached at [email protected]

Health Care

Life on the Front Lines

Dr. Andrew Artenstein

Dr. Andrew Artenstein, chief physician executive and chief academic officer for Baystate Health.
Photo courtesy of Baystate Health

Dr. Andrew Artenstein isn’t the first to notice the lack of cars on the roads, but he’s certainly among those most invested in those open roads.

“When I leave work, I’m used to traffic, and there’s no traffic,” said the chief physician executive and chief academic officer at Baystate Health. “Every day feels like Sunday out there. The streets are a lot quieter. Hospitals don’t have visitors, so the hallways are quieter.”

Fewer people out and about means the social-distancing movement has largely taken hold in Western Mass., meaning fewer transmissions of the novel coronavirus and fewer cases of COVID-19 than would be present if people weren’t staying home. The question is, how much difference will it make in the end?

“I can tell you that I don’t know the effect, but I do know anything will help,” Artenstein told BusinessWest. “It’s the right thing to do, and it will hopefully blunt the peak. It will not prevent it totally, but if you can blunt the peak, flatten the curve, we can possibly manage the surge.”

What that surge will represent wasn’t clear at press time, when the state had tallied close to 17,000 cases of COVID-19 — a number that may be much higher as you’re reading this.

Based on expert estimates, Gov. Charlie Baker said Thursday that coronavirus hospitalizations in the state will likely peak between April 10 and April 20, with the total estimate of coronavirus cases in the state ranging from 47,000 to 172,000 over the course of the epidemic, or about 0.7% to 2.5% of the population.

“It appears the community has done a really good job of generally heeding the recommendations from our national and state public-health experts, which is, if you’re not sick, don’t come to the hospital,” Artenstein went on. “People still need other types of care; people still have cardiac issues or lung issues or kidney issues. That’s not going to stop. But people who don’t need emergency or hospital-level care, for the most part, are finding care in other ways, which is what they’re being told to do. That keeps people from transmitting infection in hospitals, and keeps them away from other patients who might be sick.”

That means patient volume for non-urgent matters is indeed down at Baystate, with some of that work being moved to telephone or telehealth platforms (more on that later), as well as outpatient clinics and urgent-care centers, all of which are also trying to enforce social distancing as best they can.

What is on the rise in the emergency room are cases of respiratory illness, fevers, and coughs, with many of those being admitted and testing positive for coronavirus.

“It appears the community has done a really good job of generally heeding the recommendations from our national and state public-health experts, which is, if you’re not sick, don’t come to the hospital.”

“There’s clearly a lot of transmission going on in the community, which is exactly what you’d expect from a pandemic,” he said. “If you look at the data, the vast majority of people [with the virus] are not sick enough to need to go to the hospital, but they’re still infectious and potentially transmitting it if they’re not isolating themselves.”

Artenstein should know all about the effects of isolation on pandemics. He founded and directed the Center for Biodefense and Emerging Pathogens at Brown University for more than a decade before arriving at Baystate, so “I have a fair amount of experience with these things. But this is a unique experience … a 100-year event.”

It’s an event that has seen Mercy Medical Center, like Baystate, shift from a strategy prioritizing preventive wellness to one that focuses on readiness and the immediate response to coronavirus — and an expansion of capacity where possible, said Dr. Robert Roose, the hospital’s chief medical officer.

“At this point, we have been heavily focused on increasing our available beds and staffing to continue to respond to the needs of the community, and we have been seeing increasing numbers of patients infected with COVID — and the acuity of those cases continues to increase,” he told BusinessWest.

That increase in the number of patients requiring hospitalization reflects what Mercy’s leaders are tracking on a national level, and he expects the trend to increase over the coming weeks.

HCC Police Captain Dale Brown stacks boxes

HCC Police Captain Dale Brown stacks boxes of personal protection equipment for delivery to area hospitals.

“In regard to our local preparedness, we have a robust surge plan that identifies three different levels of escalation to increase our capacity to treat increasing numbers of patients,” he explained. “We’re also coordinating with other local and regional hospitals on a surge-capacity plan in the event we need to share resources among different hospitals in the region.”

Testing, Testing

What would help predict and manage the coming surge is a more robust array of testing resources, but local hospitals are still hampered by a limit on how much is available at the state level.

“At the present moment, we’re prioritizing testing patients who are symptomatic and in need of care in the Emergency Department, as well as healthcare workers and first responders,” Roose said. “We’re prioritizing those groups per the CDC, and as testing capacity increases, then we’ll be able to offer more testing as it becomes more readily available.”

Artenstein reported the same protocol for priority test groups: patients hospitalized with symptoms, employees showing symptoms, and some first responders who are symptomatic. “We know it’s not in our control; it’s a national issue, and we’ve been severely limited in our ability to test. It’s starting to improve because of a tremendous effort by people at Baystate and some of our government officials to help us get more testing and more capacity and more rapid turnaround time. We’re starting to see an improvement, but it’s still not where it needs to be.”

As for the coming surge, Baystate began preparing for that in a number of ways over the past few weeks, including the construction of a rapid-response triage facility just outside the entrance to the ER. It holds around 40 chairs — each of them six feet apart — for individuals entering the ER.

“There’s community transmission of the virus at this point,” said Dr. Niels Rathlev, chair of the Department of Emergency Medicine, when the project was announced last month. “And we really are preparing for more patients showing up for screening. This is not to expand testing; the real issue is to try to keep patients that don’t require admission to the hospital — acute emergency care — and screen them rapidly out here.”

Construction of the triage center is a step that mirrors what is happening in other parts of the country, Rathlev noted, adding that some areas, such as the state of Washington, established such centers weeks ago in anticipation of a surge in visits to the ER and the critical need to triage those coming in. Meanwhile, field hospitals are being created at sites like Worcester’s DCU Center and the Boston Convention and Exposition Center.

Capacity concerns also cross over into the realm of protective equipment like masks and gloves. Roose said Mercy is working aggressively with suppliers to make sure it has what it needs. “I will say we have supplies, but I don’t think any hospital around here feels particularly comfortable with the amount they have because there may be a large influx of patients at any time.”

It’s a problem that has required some creativity. Earlier this month, Patriots owner Robert Kraft sent a team plane to China to pick up 1.2 million N95 masks. In all, Kraft partnered with the state to purchase 1.4 million masks for Massachusetts, and purchased another 300,000 protective masks for New York.

Locally, institutions have stepped up enthusiastically to meet the need. Springfield Technical Community College’s (STCC) School of Health and Patient Simulation donated personal protective equipment — including surgical masks, isolation gowns, and exam gloves — to Baystate Medical Center, Mercy Medical Center, Holyoke Medical Center, and Cooley Dickinson Hospital, in addition to emergency medical services personnel in the West Springfield Fire Department.

“We recognize there is a critical need for personal protective equipment at hospitals and medical centers,” said Christopher Scott, dean of the School of Health and Patient Simulation at STCC. “By donating our supplies, we are doing what we can to protect the healthcare workers who are running short on masks and other protective equipment. The community needs to work together to ensure we defeat this pandemic.”

Holyoke Community College donated similar equipment from its health-science programs to area hospitals. HCC Police Captain Dale Brown spent a day last month conducting an inventory of collected supplies — including boxes of isolation gowns, exam gloves, masks, goggles, hand sanitizer, and microbial wipes — at the Campus Police station. A representative from the Massachusetts Emergency Management Agency picked everything up to coordinate delivery to area hospitals.

“At this point, we have been heavily focused on increasing our available beds and staffing to continue to respond to the needs of the community, and we have been seeing increasing numbers of patients infected with COVID — and the acuity of those cases continues to increase.”

Even Dakin Humane Society pitched in, donating its in-house supply of disposable surgical gowns and booties, along with other personal protective equipment, to Baystate.

“We’ve seen news stories about the need for protective equipment being faced by those in human healthcare, so we reached out to Baystate Medical Center because they’re local,” said Karina King, Dakin’s director of Operations. “We anticipated that human health workers would need these supplies soon, so we recently stopped using disposable items at Dakin and found alternative equipment, including smocks that could be laundered and re-used instead of being disposed of.”

A researcher from UMass Amherst contributed in a different way, with a dose of data. Richard Peltier, a professor in the university’s School of Public Health and Health Sciences, partnered with Dr. Brian Hollenbeck, chief of Infectious Disease at New England Baptist Hospital in Boston, to test in his lab whether used N95 facemasks were still effective at blocking infectious particles after sterilization. They determined that, yes, masks could be safely sterilized and reused.

“While these are ordinarily disposable protective devices for medical workers, these are not ordinary times,” Peltier said, “and this science shows that sterilized face masks will protect our healthcare providers who are working under extraordinary conditions.”

Across the Distance

In short, there’s a lot going on to both help hospitals prepare for the surge and to reduce non-critical traffic as much as possible. To that end, a number of institutions have stepped up their telehealth efforts, including Valley Health Systems, which includes Holyoke Medical Center, Holyoke Medical Group, and River Valley Counseling Center.

“We are expanding our capabilities to meet the needs of our patients, especially those with ongoing health concerns that need to be treated and in contact with their healthcare providers,” said Spiros Hatiras, president and CEO of HMC. “It is important for everyone to maintain their health and safety regarding pre-existing conditions, as much as it is to protect from COVID-19.”

Behavioral Health Network (BHN) introduced a new program, BHNTeleCare, that allows individuals to continue counseling sessions with their therapists from the safety of their own homes.

According to Katherine Wilson, president and CEO of BHN, “this innovation in the way we provide therapy and counseling services is groundbreaking and allows us to render services where people are. This is particularly critical as a result of the needs that have emerged due to the spread of COVID-19. It allows a counseling avenue for those suffering anxiety and in need of support during this time of crisis affecting individuals and families.”

Meanwhile, MHA also introduced its new TeleWell virtual service delivery, which allows mental-health clinicians and their clients make virtual connections using a smartphone, tablet, or computer.

“With social distancing now part of daily life, people who receive therapy for emotional support, or who would like to, may experience uncertainty when it comes to making and keeping office-based appointments,” said Sara Kendall, vice president of Clinical Operations for MHA. “TeleWell provides another option by enabling people to keep their appointments virtually. Every day, more BestLife clients are using this option.”

All these efforts — including simply staying at home to avoid transmission — are helping, Roose said.

“I cannot stress enough how important the efforts of the community are in ensuring that our healthcare providers and resources adequately meet the needs of this crisis,” he said. “Physical distancing, diligent hand washing, isolating and quarantines when appropriate — those are the efforts that will flatten the curve and lessen the impact of this disease, and ensure that our healthcare providers have what they need to provide the care the community needs.

Meanwhile, Mercy’s incident command center continues to keep in contact with the entire Trinity Health system every day. “And every single day, I stress the importance of efforts we can all take to impact this disease. It’s something we all have the power to impact if we take proper precautions and follow the guidelines around physical distancing and quarantines. I can’t stress that enough.”

Those community efforts don’t guarantee Massachusetts won’t become as strained as New York City, Artenstein said, but they help.

“My feeling is that April is going to be very challenging in Western Massachusetts, and after that, I don’t know,” he told BusinessWest. “It quite possibly could extend well into May. I don’t think we’ll be completely out of the woods, and I do think, if you look at epidemics and pandemics, there are second and third waves sometimes.”

For example, he explained, the Spanish flu of 1918 saw a second wave late that year, and an even worse third wave arrived the following spring. COVID-19 has the potential of following a similar track because it’s new, and people haven’t built up the blanket of underlying immunity that keeps seasonal flu, while dangerous as well, under control.

“With each passing day, it becomes clearer we’re living in an unprecedented time, and with that comes uncertainty,” Roose added. “As this pandemic evolves, we are all called upon to learn quickly, work collaboratively, and constantly change how we do things. This is a community crisis, and it takes involvement and the efforts and support of everyone in our community.”

Ready for the Surge

Roose emphasized that he greatly appreciates those efforts, not just in the community, but from the selfless healthcare workers on the front lines.

“I could not be more inspired and impressed by our teams of providers, clinicians, nurses, everyone showing a commitment to putting patients first and responding to the needs of the community,” he said. “In a crisis like this, people show their true character, and it’s clear to me we’re much stronger together, and our teams are rising to this challenge.”

Artenstein agreed.

“I’ve never seen a group of more dedicated, committed, and compassionate people than I’ve seen here,” he said. “They’re working hard in adverse conditions.”

At the same time, he added, “they’re nervous, scared for their familes, and scared for themselves — and they have the right to be scared. But our people are true to their mission to provide excellent, compassionate care.”

No matter what form the April surge may take.

“This is a very unique point in our history — one that, hopefully, we’ll look back on and not have to relive.”

Joseph Bednar can be reached at [email protected]

Estate Planning

A Pandemic Estate Plan

By Gina M. Barry

COVID-19, also known as the novel coronavirus, has arrived in our communities. While statistics show that many people will survive being infected, they may experience incapacity due to significant symptoms, such as breathing difficulties and fever, and, for some, the infection will be fatal.

Most have diligently stocked up on food and household supplies, particularly disinfectants. Some have also prepared a kit of ‘illness supplies,’ containing items that would be needed in the event of illness, such as a thermometer, acetaminophen, and herbal teas. Surely, this preparedness helps to alleviate some of the anxiety that has become rampant as this virus takes its toll on our communities.

However, if you were to become so ill that you could not communicate, do you know who would handle your affairs? Have you given that person the legal authority that they would need to do so without added cost, time, and administrative difficulties? Additional peace of mind can be found in ensuring that you have a plan in place should you become ill or pass away.

Gina M. Barry

Gina M. Barry

“Estate planners are using modern technology, such as videoconferencing, to help you plan with the least amount of risk to all involved.”

Fortunately, legal services have been deemed to be ‘essential’ during this pandemic, and estate planners are using modern technology, such as videoconferencing, to help you plan with the least amount of risk to all involved.

Further, unless remote notarizations become legally acceptable, strict office protocols are in place to minimize the risk of illness transmission when documents are being signed.

A pandemic estate plan should, at minimum, contain the following documents:

Last Will and Testament

Your will directs how your probate assets will be distributed after you pass away. Your probate assets are those assets held in your name alone that do not have a designated beneficiary. A will is also necessary for you to name a personal representative (formerly known as executor), who will carry out your estate. Your personal representative will gather your probate assets, pay valid debts, and distribute the balance as set forth in your will. Further, a guardian can be named in your will to take custody of minor or disabled children. Likewise, a trust may be established in your will to provide ongoing financial protection for these children and other beneficiaries who should not receive their inheritance outright, usually due to spendthrift or addiction concerns.

Healthcare Proxy — and Possibly a MOLST

A healthcare proxy is a document that designates a person to make healthcare decisions for you if you are unable to make them for yourself. Your healthcare agent should make your decisions as you would make them if you were able.

Should you lose capacity and not have a proxy in place, your loved ones will need to petition the Probate Court to become your guardian, which is a lengthy, expensive, and public process. Further, access to the courts is more restricted during the pandemic, with a number of courts being accessible only for emergencies due to court staff having received positive COVID-19 diagnoses.

‘Living-will’ language should be included within the proxy to address your end-of-life decisions. This language generally sets forth that you do not want extraordinary medical procedures used to keep you alive when there is no likelihood of recovery. Due to the need for ventilators for COVID-19 treatment, many have asked whether they would be placed on a ventilator if needed.

Fortunately, recovery is quite possible with ventilator support; therefore, the triggering event of ‘no likelihood of recovery’ would not be present in most cases, and ventilator support for COVID-19 would be instituted. Here, it is especially important to review the language in an existing document and to discuss these concerns with your named proxy.

Those of advanced age, the terminally ill, and those with painful, chronic conditions may also consider establishing medical orders for life-sustaining treatment (MOLST) in addition to a healthcare proxy. A MOLST is a form, usually printed on bright pink paper, that contains actionable medical orders that are effective immediately based upon your current medical condition. A MOLST would eliminate the need for living-will language, but the best practice would be to reference the MOLST in your proxy.

“It is important to note that a living will and a MOLST are very different. A MOLST form needs to be signed by both you and your physician and is used by physicians to understand your wishes at a glance.”

It is important to note that a living will and a MOLST are very different. A MOLST form needs to be signed by both you and your physician and is used by physicians to understand your wishes at a glance.

A healthcare proxy, on the ther hand, only takes effect if you are incapacitated. Also, a living will asks the health care agent to take into account all facts and circumstances to decide whether recovery is likely before carrying out instructions to withhold or terminate life support, whereas a MOLST sets forth decisions you have already made about what you do and do not want as far as medical care.

The MOLST takes the place of do-not-resuscitate (DNR) and do-not-intubate (DNI) forms, as the MOLST is more comprehensive, but existing DNR and DNI forms remain valid. The MOLST not only addresses these situations, but also sets forth wishes regarding hospitalization, dialysis, and artificial means of receiving nutrition and hydration.

Durable Power of Attorney

A durable power of attorney is a document that designates someone to make financial decisions for you. The durable power of attorney is a very powerful document with authority that is as broad as the powers granted within it.

It gives power to the person you name to handle all your financial decisions, not just pay your bills. Should you lose capacity and not have a durable power of attorney in place, your loved ones will have to petition the Probate Court to become your conservator, which involves the same obstacles described above as to the appointment of a guardian.

Homestead Declaration

If you own your primary residence in Massachusetts, you should also record a homestead declaration in order to protect the equity in your primary residence up to $500,000 from attachment, seizure, execution on judgment, levy, or sale for the payment of debts. In some cases, such as advanced age or disability, the equity protection can be up to $1 million.

If a homestead declaration is not recorded, there is an automatic $125,000 of equity protection, which may be adequate for some. Homestead protection will likely be particularly important as the financial consequences of this pandemic take hold.

Conclusion

The COVID-19 pandemic has brought the possibility of disability or death to the fore, and prior dismissals of ‘it won’t happen to me’ ring hollow.

We are at a time when you should presume that it will, in fact, happen to you.

That being the case, would you prefer to have a plan in place to ensure your loved ones can manage your affairs with the least amount of delay, cost, and stress? If the answer is yes, please call an estate-planning attorney today, establish or update your plan, and give yourself and your family that much more peace of mind during this pandemic.

Gina M. Barry is a partner with the law firm Bacon Wilson, P.C. She is a member of the National Assoc. of Elder Law Attorneys, the Estate Planning Council, and the Western Massachusetts Elder Care Professionals Assoc. She concentrates her practice in the areas of estate and asset-protection planning, probate administration and litigation, guardianships, conservatorships, and residential real estate; (413) 781-0560; [email protected]

Construction

Essential Questions

Since the state ordered most workplaces to close their doors last week, there has still been plenty of work going on — just less of it, in most cases, including in construction. Amid that slowdown are questions — is construction considered an essential function during this time? — and concerns, particularly concerning the amount of work being postponed in the short term and the potential long-term impact of a broad economic shutdown.

Is construction essential?

Well, to those who make their livelihood in that field, sure. Which is why they’re pleased that Gov. Baker, in his March 23 order to shutter most businesses in Massachusetts for two weeks, included among the exempt, ‘essential’ services “construction workers who support the construction, operation, inspection, and maintenance of construction sites and construction projects (including housing construction.”

That’s broad enough to include most firms — but it does nothing to prevent individual jobs from being shut down due to widespread uncertainty about the impact of coronavirus on the overall economy.

“Since Governor Baker made his announcement, I would say maybe 25% to 30% of our projects were postponed or put on hold. Some just didn’t want any outside contractors on their site,” Carol Campbell, president of Chicopee Industrial Contractors, said — only two days after Baker’s order.

The news isn’t all bad, she added, especially concerning work that’s critical to a client’s supply chain. “Our phone is still ringing, and we’re still seeing some quotes going out.”

That’s worth noting, especially as many businesses, like bars and restaurants, have closed up shop completely for the time being, Campbell noted. “We’re still working, so we’re still feel quite fortunate. But, quite honestly, I don’t know what this means in the future. We have a pipeline of work, but I don’t know when this is going to break.”

For his part, the governor doesn’t want construction to slow down too much, announcing last week that his administration is finalizing guidance to establish standards around safe practices for construction work during the outbreak of COVID-19. At a press conference, he noted that, when a project is shut down, “you may be shutting it down permanently in some cases.”

While Boston Mayor Martin Walsh ordered construction sites to shut down for two weeks, and a few other communities have followed suit, Baker is trying to avoid a broad rollback of work that could have a long-term ripple effect.

“We have a lot of housing construction currently going on in Massachusetts. To completely lose, potentially, all of that new housing for the Commonwealth, housing stock, would be a tremendous loss,” the governor added. “There’s public construction that’s going on that needs to be completed. Some of it has to do with upgrading existing infrastructure, but a lot of it has to do with expanding infrastructure that people have deemed critical and important, that needs to be continued and finished.”

In other words, essential work. Which is why Campbell hopes the economy comes back to life soon, though not at the expense of public safety.

“We have a lot of housing construction currently going on in Massachusetts. To completely lose, potentially, all of that new housing for the Commonwealth, housing stock, would be a tremendous loss.”

“The president is saying Easter, but I think that’s too aggressive,” she said, adding that she thinks other economic experts’ projections of an early-June return to normal activity seems more realistic.

“But then I fear what that means,” she added. “I made a commitment to myself two weeks ago that we’re not going to do layoffs; we’re going to go two weeks by two weeks. We are keeping people busy; when we have jobs, they’re put on jobs. We’re doing additional things in house to make sure they have a full week’s paycheck and health benefits. So, right now, my business brain is still working, but the empathy and social side of my brain and heart have me worried about my employees.”

Vital Arguments

Across the U.S., the construction sector in in varying shades of limbo at the moment because the federal government recently released a list detailing industries whose workers are “essential” and should continue normal work schedules. Although the document lists industries for which construction is critical, construction itself was not explicitly included — and some states consult that list when determining which industries can work during shelter-in-place orders, notes Stephen Sandherr, CEO of Associated General Contractors of America.

“Halting construction activity will do more harm than good for construction workers, community residents, and the economy,” he said in a statement last week, noting that construction firms are already acting to ensure the safety and health of their employees in the face of the outbreak, including increased hygiene and halting group gatherings of staff, on top of the fact that construction workers already wear protective equipment, including gloves that will help protect them and their co-workers.

“Given the precautions already in place, halting construction will do little to protect the health and safety of construction workers. But it will go a long way in undermining economic vitality by depriving millions of workers of the wages they will need over the coming days,” Sandherr added. “At the same time, these measures have the potential to bankrupt many construction firms who have contractual obligations to stay on schedule or risk incurring significant financial penalties.”

Boston’s temporary construction ban — which excludes “emergency work,” including emergency street repairs and utility hookups — has alread caused concern due to the threat of delay-related claims, note Steven Gates and John Gavin of the international law firm K&L Gates, writing in National Law Review.

“Although each contract needs to be examined individually, many contracts contain force majeure clauses that may excuse delays based on the city’s ban on construction or delays generally caused by the outbreak,” they explain, noting that an analagous situation was the restrictions put in place in New York City in the aftermath of 9/11, when courts recognized that the circumstances could support a defense of impossibility.

During the temporary shutdown in Boston, some companies are looking to make an impact against coronavirus. Associated Industries of Massachusetts (AIM) reported that Suffolk Construction of Boston is donating more than 1,250 N95 protective masks to the Mass General Brigham hospital network so they can be used to protect patients and medical personnel. The firm has also reached out to other construction companies in the Boston region to encourage them to donate their masks to local hospitals to assist in the effort.

Spreading Anxiety … and Hope

Back in Western Mass., Campbell said her company’s policies and protocols for a time like this are in order, and they’ve always been diligent about cleanliness and reducing the spread of germs.

What she’s more concerned about is the long-term damage any sort of major construction-industry slowdown will produce. The global financial collapse of 2008 spurred the Great Recession, but because of how its projects were scheduled, Chicopee Industrial Contractors had strong years in 2008 and 2009.

“Then, wham, it was like hitting a brick wall,” she said. But at least there was time to see the tough years coming. “With this, we felt it right away with everyone else, and usually we don’t because of the type of business we are.

“If you go back to every recession when I’ve been interviewed by BusinessWest, I’ve made the same statement — ‘I’ve seen nothing like this before,’” she continued — and she especially feels that way right now, even though no one can tell whether the current climate will, in fact, bring on the ‘R’ word.

“I feel every recession should be the same, right? You play by the rules and come out on the other side,” Campbell went on. “I don’t know. With the stimulus package, I hope there’s help for small businesses, yet the other side of me knows, with all the increases in taxes we’ll see, we’re going to be chasing our tails for quite a long time.”

In AIM’s report on employer concerns surrounding COVID-19, Gary MacDonald, executive vice president of AIM HR Solutions, said those he’s spoken with have, like Campbell, been busy exercising the empathy part of their brains because they know workers are worried.

“I made a commitment to myself two weeks ago that we’re not going to do layoffs; we’re going to go two weeks by two weeks. We are keeping people busy; when we have jobs, they’re put on jobs.”

“We have seen an overwhelming sense of concern from companies about their employees’ welfare. ‘How can we best keep them safe? What can we do to keep them employed? If we have to reduce our workforce, how do we continue pay and benefits the best we can?’” he noted, adding that his team has answered countless calls from worried AIM members during the past two weeks. “The crisis has really brought out the best instincts of employers as they fulfill their responsibilities as the keepers of economic opportunity in Massachusetts.”

In short, he added, “we hear this consistent expression of compassion, care, and ‘we are in this together.’”

Sandherr said he hopes that concern is reciprocated by lawmakers and governors who can, in some ways, impact the amount of construction work going forward. “We understand the need for social distancing to help slow the spread of coronavirus. But needlessly shutting down projects where workers are already protected will not help. Instead, it will threaten the livelihood of millions of craft professionals, force many small and family-owned businesses to shut down, and undermine the nation’s ability to respond to natural disasters, including the coronavirus.”

Right now, Campbell said, her employees are not too frightened.

“We’re telling them we will get through this — and it is we — and we will come out on the other end,” she told BusinessWest. “But other people I’ve talked to are panicked, and rightfully so. How many people have six to eight months of income in their savings accounts? I know all the financial advisors say to do that, but most do not.”

At a time when everyone — employers and workforce alike — are in an unprecedented kind of limbo, that other end can seem frustratingly out of reach.

Joseph Bednar can be reached at [email protected]

Coronavirus Opinion

Opinion

By George O’Brien

 

Remember that classic scene in Young Frankenstein (even you Millennials have seen it, I’m sure) when Gene Wilder (Dr. Frederick Frankenstein, pronounced Frankensteeen), and Marty Feldman (Igor) are in the graveyard digging up the corpse that will become the monster. Wilder says, “what a filthy job!” Feldman says, “it could be worse.” Wilder asks, “how could it possibly be worse?” Feldman says, “could be raining.”

And then it starts pouring.

Life has felt like that these past few weeks. Someone will say, ‘how could it be worse?’ And it starts raining, in a proverbial sense. People have lost their jobs. Businesses have lost some, most, or all of their revenue streams. People are running out of toilet paper — or they’re really, really afraid that they will. We lost Tom Brady to the Tampa Bay Buccaneers! (The who?) People stuck at home are losing their patience, if not their minds, and we’re just really getting started with this pandemic. And then it snowed on Monday!

There are no sports! How many times can we watch the Patriots beat the Falcons in replays of Super Bowl LII? We know how it ends! The Masters has been postponed if not cancelled. Golf courses are apparently not on the ‘essential’ businesses list put out by the governor’s office. How can golf courses not be on the essential businesses list?

If anyone says ‘it could be worse,’ our immediate temptation is to say, ‘no, it can’t.’

To borrow from Dickens, these really are the worst of times. This is worse than any downturn in the economy, worse than 9/11, worse than the Great Recession. It’s worse because there is so much uncertainty — about today, tomorrow, three months from now, and a year from now.

Not only that, but life is different now. Everything is weird. If we’re actually out on the sidewalk walking and we approach other people, we avoid them like a game of Frogger. If we’re out at the store, we look at everyone as if they might have the virus, and the look isn’t a good one.

Everyone is on edge about their jobs, their life savings, their 401(k), their health, the health of their loved ones. You can see it in their faces, and if you’re talking to them on the phone (which we all are), you can hear in their voices. You can also hear them yawn, because people are not sleeping, by and large. Who could sleep with all this going on?

If we’re actually out on the sidewalk walking and we approach other people, we avoid them like a game of Frogger.

And yet, there is something else, something far more powerful and positive going on, and it’s worth noting.

Yes, there are now security guards and even off-duty police in the toilet-paper aisle in many supermarkets. And yes, sales of guns and ammo are skyrocketing. And yes, we’re already starting to see a rise in reported instances of domestic violence. But despite all this, it’s abundantly clear to me that people are caring more about each other.

And it’s about time.

People don’t just put their initials at the end of an e-mail anymore. They say ‘be well,’ ‘stay well,’ or ‘take care of yourself.’ And they mean it. People are bringing food and coffee to those who are shut in (and that’s most people now). Co-workers are being nicer to each other. When I dropped off the golf cart at a club in Connecticut last Saturday, I walked over to the attendant who was parking it — someone who would likely be unemployed in about 27 hours — and said (from six feet away), “good luck to you — hope you get through this OK.” And I meant it.

You’re seeing a lot more of that these days, and this, more than anything else, will get us to the other side — whenever and whatever that happens to be.

Yes, it could be worse. It could be raining. It seems like it’s already raining — pouring, in fact. But there’s a little sunlight trickling in.

And it might be just enough.

George O’Brien is the editor of BusinessWest.