As the COVID-19 pandemic rages, and businesses suffer, many are asking questions about their prospective legal options. Federal, state, and local governments are passing measures to help. Phrases like “force majeure,” “impracticability” and “frustration of purpose” are being thrown around as businesses and people analyze their contracts. Insurance policies are being carefully evaluated.

My friend Joe Lesovitz, a Partner in Citrin Cooperman’s Forensic, Litigation, and Valuation Services Group , wisely pointed out the need for businesses to proactively prepare to take advantage of all possible mechanisms of recovery.

It is too early to know whether insurance, government loans or other programs, litigation, negotiation, or all of the above will be the best avenue to pursue, but it is not too early to prepare the documentation and evidence businesses will need to pursue any path.

Joe explains businesses should proactively set up separate accounts in their internal accounting system and collect all of the following financial documents to support any losses related to COVID-19 expenses:

• Historical and current annual financial statements
• Federal and state annual tax returns
• Monthly profit and loss statements
• Budgets, forecasts, or projections done prior to and after the event
• Monthly bank statements
• Inventory reports
• Payroll records
• Invoices and purchase orders
• General ledger accounts established to account for any expenses related to the loss such as additional payroll, shipping, temporary facilities, etc.
• Documentation to support extra expenses including receipts, invoices, time sheets, advertising costs, etc.

Excellent advice. Thanks, Joe.

This alert is intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have. We are fully operational during this pandemic and stand ready to assist as you navigate this ongoing and developing COVID-19 situation. Please do not hesitate to contact any member of our response team with your questions and concerns.