COVID-19 – The “Real World” Market Impact We See To Date
Over the last several weeks, our phones have been ringing – a lot. Landlords and tenants want to know what lease obligations they can temporarily forego and what rights they do or do not have, given all that has been wrought by COVID-19, including mandatory closures, suggested closures, social distancing, and the inability to access government offices or courts, to travel, to obtain inventory, supplies, or materials, and, generally, to conduct business and meet responsibilities as contemplated when the governing document was signed. In the last four weeks, there has been much written about the lease clauses and avenues to pursue that are the most relevant to a technical analysis of the questions posed – the force majeure (a/k/a impossibility of performance) clause; the long-shot condemnation clause; the equitable theories based on impossibility, mutual mistake, or simple fairness; insurance recovery; and bankruptcy. So what’s happening in the “real world”? Here’s what we are seeing in our practice. 1. Everyone is nervous. Although this anxiety is, in large measure, due to the facts that we know, it is also clearly driven in large measure by having to plan for the unknown – how bad, how long, what does the “recovery” look like? 2. Obviously, many businesses have already seen drop-offs – in many instances, precipitous drop-offs...