Public Service Announcement related to COVID-19.

The Entrepreneur Assistance Clinic (the “EAC”) of Penn State Law, based in central Pennsylvania in a startup incubator next to Penn State’s largest campus, has served over 1,000 new startup and early-stage clients in the past several years as it expanded to serve all of Pennsylvania through in-person meetings and computer-based videoconferencing.  Since its inception, the EAC has focused on assisting entrepreneurs as they started and grew their businesses, which range from hair salons and family farms to IP-dependent university spinouts.

The EAC has vicariously enjoyed helping small companies on the up slope, but now the EAC has decided, as its clients would do, to pivot to help companies on the down slope as well because most are faced with severe business pressures due to the coronavirus.

The EAC is, therefore, expanding its scope to provide services that will be needed for the foreseeable future.  These services will include counseling, drafting and negotiation with respect to the following:

  • Managing liabilities, such as loans, leases and contractual obligations—many creditors, landlords and other counterparties may be willing to enter into forbearance and restructuring agreements.
  • Evaluating performance obligations—many companies will need to assess their own contractual obligations and the obligations of the other parties to their contracts under such principles as force majeure, impossibility and frustration of purpose.
  • Counseling regarding personal liability—although we have steered most of our clients to forming LLCs, many of them—as well as many other small-business entrepreneurs—are concerned about their own potential personal liabilities.
  • Changing equity ownership—some companies may be able to attract new capital from existing or new investors, while others will need to amend operating agreements to reflect the departure of co-founders who decide to move on.
  • Evaluating possible insurance coverage—some clients may have insurance policies that provide coverage for business interruption or contingent business interruption, or both.
  • Applying for governmental assistance—many clients will be eligible to apply for SBA and other governmental programs that are being implemented to help businesses that have been hurt by the virus outbreak.
Happy Valley Launchbox, State College, PA

Although physically located at the Happy Valley LaunchBox in downtown State College, the EAC serves clients throughout Pennsylvania.  Most clients are referred by economic development groups throughout Pennsylvania.

The EAC provides free business-related legal services to startup and early-stage businesses that cannot afford traditional legal representation.  If the EAC were not available, most of its clients would either operate without legal advice or attempt do-it-yourself solutions posted on the Internet.  Students at Penn State Law at University Park staff the EAC, subject to the supervision of two full-time licensed lawyers.  The EAC will continue to operate during the summer once the current academic semester ends.

The EAC does not provide intellectual-property advice or litigation services.  However, Penn State Law has its Intellectual Property Law Clinic, which is often able to provide IP services related to patents, trademarks, trade secrets and copyrights.

Tom Sharbaugh is the Director of Entrepreneurship Assistance Clinic. Prior to the joining Penn State Law, Sharbaugh was a partner at Morgan, Lewis & Bockius, including 14 years as Managing Partner of Operations.