COVID-19: Legal department considerations

COVID-19 has significantly impacted the global economy, creating more risks, threats, and uncertainties for organizations to navigate.

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Buy-sell agreements often include a purchase price adjustment mechanism based on the difference between closing working capital and a target level of working capital. Disputes frequently result when closing working capital differs substantially from the target.

The financial uncertainty due to the impact of COVID-19 has left many companies with significant changes to the amount and composition of working capital. With the continued unpredictability of financial performance due to COVID-19, companies who are engaged or are planning to engage in buy-sell agreements should consider the following potential increased risks related to COVID-19 that could affect working capital adjustments.

The financial impact of COVID-19 will likely put pressure on corporations’ financial results and present potential challenges for individual employees. This pressure may increase the temptation for individuals to engage in improper acts in order to address their immediate financial needs or resort to financial statement manipulation to meet stakeholder expectations.

This article discusses risks organizations should consider related to financial statement fraud.

Companies are facing significant operational, financial, and strategic challenges as a result of the coronavirus (COVID-19) breakout. Lower revenues will likely result in budget modifications, with funding allocated to those parts of the business deemed critical to meet current and near-term operations.

This piece discusses conducting effective remote investigations during times of uncertainty.

Recent accusations of stock dumping raise questions about whether those made privy to nonpublic material information during times of crisis have placed their personal financial interests ahead of those of the investing public or their companies, potentially violating insider trading laws.

This perspective discusses insider trading in the wake of the pandemic and key considerations for boards and audit committees.

The coronavirus pandemic has disrupted business transactions and relationships in virtually all industries and across most geographies. The specific obligations related to those transactions and relationships are typically detailed in contracts with customers, suppliers, service providers, lessors and lessees, supply chain and sales channel partners, creditors, borrowers, and other parties.

This installment highlights considerations arising around clauses in contracts and the associated risks on both the buy side and sell side, and suggests ways to identify those risks.

What is it about an economic crisis that causes organizations to become more vulnerable to fraud? Factors such as financial pressure to meet earnings expectations, employees who feel the need to protect the company or themselves, and gaps in controls resulting from decisions the business has been forced to make many contribute to increased fraud risk.

This piece will discuss the opportunity for fraud investigators to redefine how they conduct investigations becoming more tech-enabled and relying more heavily on the insights data and analytics can provide.

COVID-19 is causing unprecedented disruptions to businesses and supply chains. The growing crisis has increased the global demand for products, compelling many businesses and competitors to temporarily combine required operations to facilitate production and distribution of COVID-19-related products and services.

This installment of Forensic Focus on COVID-19 discusses cooperation, collaboration, and information sharing during the crisis.

To address the financial impact of COVID-19, organizations are taking initial steps to recover losses, including standing up loss accounting centers; implementing tools to aggregate, analyze, and monitor losses; and developing relief recovery strategies. At this point, those pursuing or expecting insurance reimbursements and other potential sources of funding, such as the Coronavirus Aid, Relief and Economic Security (CARES) Act or government agency programs, should be preparing well-supported loss assessments, as well as claims and relief recovery substantiation.

This article discusses valuing business insurance claims.

Companies continue to face significant challenges as a result of the COVID-19 pandemic. Compliance teams, in particular, face specific issues on financial, operational, and strategic fronts.

Nevertheless, even with challenges such as working from home and with significantly reduced budgets, there are still meaningful opportunities to assess and improve corporate compliance programs.

The COVID-19 pandemic has shined a light on a problem already spiraling out of control: product counterfeiting and pirated goods. With counterfeit goods representing more than three percent of world trade, virtually no sector is immune to counterfeiters taking advantage of challenged supply chains.

The next article in our series looks at how corporations at risk can smartly invest in protecting their brand and customer safety and demonstrate to management that their efforts are not just worth the investment, but in fact adding to and improving the company’s bottom line.