September Edition 2020

56 Regulatory Approvals and Filings -Securing regulatory approvals and other governmental filings (e.g., preclearance merger certificates), performing lien and litigation searches and obtaining good standing certificates may be delayed due to Secretary of State offices being insufficiently staffed. Federal filings may also be impacted, such as filings with the Committee on Foreign Investment in the United States, whose reviews are currently delayed. Further, as the pandemic has substantially impacted the finances of local, state, and federal agencies, governmental authorities may cut expenses by reducing their workforce, resulting in additional backlogs. Increased scrutiny in these areas of due diligence will help any prospective buyer or investor evaluate transaction opportunities that arise post- COVID-19. Note that comprehensive due diligence is even more important for acquisitions or investments into distressed companies, due to the difficulty in recovering under indemnification provisions post-closing. This piece was co-authored by New York partner, Ariel Yehezkel , h ead of Sheppard Mullin's Corporate and Securities practice group and Team Leader of the firm’s Israel Practice, and New York Corporate associates Allison Troianos a n d Karl Buhle.