WILMINGTON – Dozens of downtown Wilmington law firms and more than 200 firms statewide obtained federal loans to help them keep their doors open amid the impact of the COVID-19 pandemic that closed courthouses and ...
WILMINGTON - Dozens of downtown Wilmington law firms and more than 200 firms statewide obtained federal loans to help them keep their doors open amid the impact of the COVID-19 pandemic that closed courthouses and slowed filings.Topping the list of firms was Wilmington’sMorris James, Potter Anderson, andMaron Marvel, each of which secured at least $2 million in loan proceeds through the U.S. Small Business Administration’s Paycheck Protection Program (PPP),according to newly released data. They were named among the more than 2,000 Delaware recipients of the SBA-backed loans that received between $150,000 and $10 million, the PPP’s max limit.The SBA released the redacted PPP data July 6 after being sued by media companies that argued that it was defying the Freedom of Information Act by declining to make the info available. The loan program was perhaps the Trump administration’s most prominent response to the economic havoc wrought by the COVID-19 pandemic. It allowed companies to apply for forgivable loans worth up to eight weeks of payroll costs.
[caption id="attachment_200991" align="alignleft" width="696"] 37 Delaware companies said they'd retain 250+ jobs with their PPP loans -- DBT graphic[/caption]
The most-detailed data identifies 660,000 small businesses and nonprofits organizations nationwide that received at least $150,000 in funding since the program’s launch in early April as well as the number of jobs supported by the loan. It did not include each loan’s value, but instead provided a range.Delaware has long had a thriving legal scene, due in no small part to its renowned Court of Chancery and highly trafficked federal bankruptcy court. The industry supports thousands of lawyers in downtown Wilmington. The arrival of the COVID-19 virus, however, caused the judiciary of the state’s court system to close courtrooms to lawyers and the public alike on March 23 to try to stem the tide of the virus. For weeks, lawyers were limited to videoconferencing to handle motionsOn June 8, the judiciary began to reopen courts to lawyers in a phased approach with a heightened focus on social distancing. Two weeks later, it entered Phase 2 of its plan, which allowed non-jury trials to begin again.Chief Justice C.J. Seitz announced this week that Phase 3, which allows jury trials to begin again and would therefore dramatically increase the number of people in courthouses, would be delayed due to a recent spike in COVID-19 cases.“Given the continuing uncertainty about the progress of the virus in Delaware and around the country, we will continue for at least another month, and probably longer, under Phase 2 of our reopening plan to reduce the risk of exposure to our employees, attorneys, litigants and the public at large at court facilities,” he wrote in announcing his decision.To weather the pandemic’s impact, firms in Delaware and around the region have been cutting costs, including furloughing lawyers, enacting temporary salary reductions, changing summer associate programs, and delaying starting dates for first-year lawyers.The PPP loans provided a bridge fund of sorts for many firms, allowing them to cover payroll costs at a time when billable hours were slower to materialize amid widespread office and court closures. Most of the firms that reported an approval date received the money in early April.“Our firm is a grateful recipient of PPP funds, which allowed us to preserve nearly 200 jobs, thereby protecting our employees and ensuring that we could continue to serve our clients uninterrupted. The funds were used in accordance with the program’s guidelines to pay salaries, rent and associated costs,” said Paul Bradley, managing member of Maron Marvel’s Wilmington office.While Morris James and Potter Anderson, the fourth and fifth largest Delaware firms by size, were listed among the loan recipients, other big names in the state were noticeably absent. The state’s largest firm, Richards Layton, did not receive a loan, nor did other Top 10-size firms like Young Conaway, Morris Nichols, Skadden Arps, Grant & Eisenhofer, or McCarter & English.Other big-name firms that did receive funds include Bayard PA and Ashby & Geddes PA, both of which obtained at least $1 million. Twenty firms received at least $350,000, including Connolly Gallagher, Cooch and Taylor, and more.A small number of legal services companies also obtained loans, such as the Community Legal Aid Society and the Legal Services Corporation of Delaware, both of which serve low-income clients. They received at least $1 million and $150,000, respectively.In total, 56 Delaware law firms or legal services companies received PPP loans of $150,000 or more, which protected at least 1,621 jobs. In the unidentified smaller recipients under $150,000, 174 law firms or legal services companies received a total of more than $8.3 million, protecting an additional 521 jobs.WSFS Bank led the way in processing the larger loans, completing half of the 56, as well as 26 of the smaller unidentified loans. M&T Bank ranked second, with nine of the larger loans and 54 smaller loans.By Jacob Owensjowens@delawarebusinesstimes.com