How To Dissolve a Corporation in North Carolina?

As an attorney who routinely handles business law related questions this situation is not unusual. Most businesses have a life cycle and it's good to know how to legally dissolve a corporation which has decided to end its operations.

North Carolina has laws specific to this question. In its most basic form, the corporation needs to vote to dissolve and then file the proper documents with the North Carolina Secretary of State's office. The process is slightly different if you have issued shares or have not issued shares, and if you have a board of directors or not. There are a number of other things a corporation has to do as well. Keep in mind, also, that there are other ways and methods by which a corporation can become dissolved, such as by court order.

A partial excerpt of the relevant section of the North Carolina General Statutes, Chapter 55 Article 14, Part 1, is pasted further below; while not exciting, it's a must-read for anyone considering corporate dissolution or already in the process of dissolving a corporation.

The Small Business Administration has issued a guide that will also assist you in dissolving a corporation. It is not specific to a particular state, but is generally helpful. It is recommended that you procure the services of an attorney in order to assist you with this process.

If you have a need for business law advice or services in North Carolina, South Carolina, Florida, Georgia, or Tennessee, please feel free to contact our office for assistance.

Article 14.

Dissolution.

Part 1.  Voluntary Dissolution.

§ 55‑14‑01. Dissolution by incorporators or directors.

(a)      The board of directors or, if the corporation has no directors, a majority of the incorporators of a corporation that has not issued shares may dissolve the corporation by delivering to the Secretary of State for filing articles of dissolution that set forth:

          (1)      The name of the corporation;

          (1a)    The names and addresses of its officers, if any;

          (1b)    The names and addresses of its directors, if any, or if none, the names and addresses of its incorporators;

          (2)      The date of its incorporation;

          (3)      That none of the corporation's shares has been issued;

          (4)      That no debt of the corporation remains unpaid;

          (5)      Reserved for future codification purposes; and

          (6)      That a majority of the incorporators or the board of directors authorized the dissolution.

(b)      A corporation is dissolved upon the effective date of its articles of dissolution. (1955, c. 1371, s. 1; 1959, c. 1316, s. 261/2; 1989, c. 265, s. 1; 1989 (Reg. Sess., 1990), c. 1024, s. 12.19.)

§ 55‑14‑02.  Dissolution by board of directors and shareholders.

(a)      A corporation's board of directors may propose dissolution for submission to the shareholders.

(b)      The following requirements shall be met for a proposal to dissolve to be adopted:

          (1)      The board of directors shall recommend to the shareholders that the proposal to dissolve be approved unless one of the following circumstances exist, in which event the board of directors shall communicate the basis for not recommending approval of the proposal to dissolve to the shareholders at the time it submits the proposal to dissolve to the shareholders:

                    a.     The board of directors determines that, because of conflict of interest or other special circumstances, it should not make a recommendation that the shareholders approve the proposal to dissolve.

                    b.     G.S. 55‑8‑26 applies.

          (2)      The shareholders entitled to vote must approve the proposal to dissolve as provided in subsection (e).

(c)      The board of directors may condition its submission of the proposal for dissolution on any basis.

(d)      The corporation shall notify each shareholder, whether or not entitled to vote, of the proposed shareholders' meeting in accordance with G.S. 55‑7‑05. The notice must also state that the purpose, or one of the purposes, of the meeting is to consider dissolving the corporation.

(e)      Unless the articles of incorporation, a bylaw adopted by the shareholders, or the board of directors (acting pursuant to subsection (c)) require a greater vote or a vote by voting groups, the proposal to dissolve to be adopted must be approved by a majority of all the votes entitled to be cast on that proposal.  (1901, c. 2, s. 34; Rev., s. 1195; C.S., s. 1182; 1941, c. 195; G.S., s. 55‑121; 1951, c. 1005, s. 4; 1955, c. 1371, s. 1; 1989, c. 265, s. 1; 2013‑153, s. 14.)

§ 55‑14‑03. Articles of dissolution.

(a)      At any time after dissolution is authorized pursuant to G.S. 55‑14‑02, the corporation may dissolve by delivering to the Secretary of State for filing articles of dissolution setting forth:

          (1)      The name of the corporation;

          (1a)    The names and addresses of its officers;

          (1b)    The names and addresses of its directors;

          (2)      The date dissolution was authorized;

          (3)      A statement that shareholder approval was obtained as required by this Chapter.

          (4)      Repealed by Session Laws 1991, c. 645, s. 10(c).

(b)      A corporation is dissolved upon the effective date of its articles of dissolution.

(c)      For purposes of this Chapter, a dissolved corporation is a corporation whose articles of dissolution have become effective and includes a successor entity to which the remaining assets of the corporation are transferred subject to its liabilities for purposes of a liquidation. (1901, c. 2, s. 34; Rev., s. 1195; C.S., s. 1182; 1941, c. 195; G.S., s. 55‑121; 1951, c. 1005, s. 4; 1955, c. 1371, s. 1; 1989, c. 265, s. 1; 1991, c. 645, s. 10(c); 2005‑268, s. 31.)

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Congrats, You’ve Inherited a Mess

By Jason McGrath

You’ve just inherited the family home, where you’ve not lived for many years, after the unfortunate but inevitable passing of your last living parent. You know there is a mortgage loan for the property. You have many questions, which may generally be summarized “What are my options, how does this work, and what happens now?” The primary focus of this article is to explore the legal and practical factors which play key roles when heirs attempt to deal with the mortgage loan and the mortgage loan servicer.

A Commonplace Scenario

Dad passed years ago, and Mom inherited his interests in the family home. Mom just passed away, and Daughter has inherited all interests in the family home, although she has not lived there for 20 years. Mom was debt free except for the mortgage loan on the family home. Daughter knows of the existence of the mortgage loan, with an associated lien on the family home, but she doesn’t know much more and doesn’t have any specialized knowledge or experience with mortgage loans, deeds of trust, or similar issues. Daughter never wanted to be the executor, so Cousin Sally is performing that role.

Daughter finds a mortgage loan statement from Questionable Loan Servicing, LLC. It appears that Mom had not paid the mortgage for the last few months before her death; the loan statement lists the account as delinquent to the tune of $5,000.00, with an overall unpaid balance of $225,000.00. A week later, Daughter calls Questionable Loan Servicing, LLC, who won’t speak to her without Mom’s authorization. The fact that Mom isn’t alive to give that permission doesn’t seem to have the impact it should with Questionable’s customer service representative. However, good news! Since Daughter says she inherited the house, she must be the Executor; if the Executor provides certain formal documents, Questionable will speak to the Executor about the mortgage loan status, options, and any other relevant issues. “No, I’m not Executor, but I’ve been told by the attorney that I own the property and should be able to deal with the mortgage loan.”

Questionable’s earnest and well-intentioned customer service representative promises to look into the situation and send written information which will clarify if and how Daughter may be able to deal with the mortgage loan and get access to the loan account. Daughter confirms her own mailing address and says she’ll wait for the documents. Three weeks later, Daughter finds five different letters from Questionable, all sent to the family home; they are:

1. a letter to Mom which says that $232,500.00 is now due and that the matter has been referred to an attorney to initiate foreclosure proceedings;
2. a letter to Mom which says that Questionable may be able to assist with foreclosure-avoidance options;
3. a letter to Daughter which says Questionable cannot talk to her until she provides proper legal authorization;
4. a letter to the Executor which says that the Executor should provide Questionable with Mom’s death certificate, a copy of the trust (but there was no trust!), and the property deed which shows who the new owner is (but there is no such deed!); and
5. a letter to Mom’s Estate which reminds everyone that the loan has a “due upon conveyance” clause, and that if ownership of the home is transferred without the mortgage loan note-holder’s permission, the loan could be accelerated and be called due in full.

Daughter, now completely discouraged, begins to slowly knock her head against the nearest wall and contemplates opening another bottle of Mom’s scotch. What can she do? What should she do? Will they ever talk to her? Can they foreclose? Does she need to refinance? Does she really own the home? Can they sue her over the unpaid mortgage? What a mess.

Heirs Interacting with the Mortgage Loan Servicer

It’s almost impossible to figure any of this out if the mortgage loan servicer won’t provide information and recognize you as the owner, or at least as an individual authorized to have access to the loan account, so getting that access almost always needs to be the first step. Here is the most relevant part of the Code of Federal Regulations on the issue of a mortgage loan servicer’s duties in such scenarios:

(a) Reasonable policies and procedures. A servicer shall maintain policies and procedures that are reasonably designed to achieve the objectives set forth in paragraph (b) of this section.

(b) Objectives. (1) Accessing and providing timely and accurate information. The policies and procedures required by paragraph (a) of this section shall be reasonably designed to ensure that the servicer can:

(vi) Upon notification of the death of a borrower, promptly identify and facilitate communication with the successor in interest of the deceased borrower with respect to the property secured by the deceased borrower’s mortgage loan.

The Consumer Financial Protection Bureau (the “CFPB”) has defined “successor in interest” in this context to mean “the spouse, child, or heir of a deceased borrower or other party with an interest in the property.” The CFPB requires loan servicers to follow the requirements as explained in the above-referenced CFR, and has formally observed that the existence of and compliance with such policies and procedures in scenarios involving transfer of ownership due to death is important to “reduce the number of unnecessary defaults and foreclosures….”
Congrats

The same CFPB bulletin provides practical examples of actions the loan servicer should take to be in compliance, thus also providing successors in interest like Daughter insight into what can be done from the other side of the equation. In summary, Daughter should at a minimum provide a copy of the death certificate, any and all documents which evidence her as the heir / new owner (no, in North Carolina this would not include a deed in her name, which shouldn’t exist), and even copies of the CFR and CFPB items cited herein.

Daughter needs to be persistent, be patient (to a certain extent), to maintain good documentation, and to try to make sure the loan servicer’s various departments are appropriately communicating with each other and with external parties (such as any substitute trustee and/or law firm retained to handle a foreclosure of the family home). If the loan servicer fails to effectively cooperate, Daughter should consider filing a complaint with the CFPB and perhaps the North Carolina Commissioner of Banks. The bureaucratic roadblocks are often formidably Byzantine, and I can personally vouch for some of the horror stories which arise from dealing with loan servicers.

Does the Heir, as new Owner, Need to be “Approved” by the Creditor in Order to Avoid Foreclosure?

Most people don’t realize that mortgage loan agreements and/or deeds of trust often have a “due upon conveyance” clause (often called a “due on sale” clause, with such description being an incomplete one). These contractual clauses, in essence, allow the creditor to call the mortgage loan due if ownership of the associated real property is conveyed to someone else without creditor’s permission. There are good and understandable reasons for such clauses. However, for your typical residential property, these clauses are not enforceable when the conveyance occurred due to death of the previous owner and the resulting conveyance was to a relative. In our scenario, the creditor cannot call the loan due and/or foreclose merely because Daughter is now the owner, with the creditor not having approved her ownership.

Independent of any due on conveyance clause, the heir’s ownership of the property does not in any way need to be approved by the mortgage loan creditor or anyone else in relation to the loan or the deed of trust. The rights to own real property and to pass it down to subsequent generations are very strongly protected ones.

Must the Heir Pay the Mortgage Loan?

In our scenario, Daughter may wonder if, merely by becoming the owner, she has now somehow become obligated to pay the mortgage loan. The answer is no, but barring some other agreement, if the loan isn’t paid in accordance with the contractual loan terms, the creditor can accelerate the loan and foreclose via the deed of trust just as if Mom was still alive and still the owner. Unfortunately, mortgage loan agreements typically don’t contain any type of “grace period” which allows for missed payments during times of confusion and transition such as the death of the borrower.

So the bad news is that the loan does need to be paid if Daughter wants to keep the property. However, unless Daughter has formally agreed to become personally liable for the loan, the creditor cannot pursue  her personally for money or any other damages if the loan is not paid as agreed.

One somewhat miscellaneous factor to consider is that a foreclosure case may contain the Daughter as a respondent, and if a foreclosure occurred it is at least possible that her credit report (arguably incorrectly / illegally) would reflect a “foreclosure.”

Can the Heir Refinance or Modify the Loan? Can the Heir Sell the Property or Otherwise Dispose of it?

Although most people seem to think of refinancing as just restructuring the loan, of course a refinance is an entirely new loan, even if it’s with the same lender. By contrast, a modification is an amendment of the current loan terms. Refinances are treated very differently as compared to modifications in the context of inherited properties.

In our scenario, the mortgage loan is delinquent and a foreclosure case appears to be in the works. Daughter’s right to refinance the family home is not restricted due to the mortgage loan being delinquent, and even the existence of a foreclosure case would not restrict said rights. She, as owner of the property, is free to refinance the property by seeking a new loan which would pay off the pre-existing loan and result in the pre-existing deed of trust being canceled. This new loan would presumably have Daughter as the borrower and the fact that she inherited the property would be of little to no relevance.

With regard to modifying the loan Mom had on the property, yes, Daughter can try to negotiate a modification of the same. In almost every instance in which Daughter seeks a modification of the loan, the creditor will require her to personally become an obligor on the loan in exchange for offering modification terms. We might normally say the creditor would require her to “assume” the loan, but word choice matters in this context, as explained in a following section.

Daughter can sell the property whether the loan is current or not, but the loan will need to be paid off as part of the sale (barring some other agreement). Daughter also has the power to enter into other types of transactions, such as a discounted payoff (“DPO”) of the loan which allows her to own the property free and clear, or a deedin-lieu (“DIL”) of foreclosure which transfers ownership of the property to the mortgage loan creditor. In some instances, Daughter may not bother negotiating a DIL, as the primary advantage of that resolution compared to a foreclosure is usually the waiver of the creditor’s right to seek damages from the borrower, something Daughter would not need to worry about as long as she had not formally agreed to become personally obligated on the loan.

Of course, any real property-related transaction an heir considers entering into must take into account whether there is a risk of the real property being pulled into the estate to be liquidated to obtain cash to pay creditors besides the mortgage loan creditor. In our example scenario, Mom has no other creditors and thus Daughter is not concerned with this issue.

Should the Heir Agree to Become Personally Obligated on the Mortgage Loan?

Obviously, what someone in Daughter’s situation “should” do depends on many factors. Let’s assume Daughter wants to maintain ownership of the family home. If she can reinstate the loan directly, typically by paying the entire amount the servicer quotes for reinstatement, she will then avoid having to consider a modification and the personal liability on the loan which would likely be required. She would then have the benefits of ownership without some of the potential negatives of having a mortgage loan.

If Daughter needs to modify the loan and the creditor will allow that without requiring her to become personally obligated on the loan, great -- but there is almost no chance of that happening. The creditor will almost certainly require her to become personally obligated in exchange for that modification.

I have been involved in cases in which the creditor would not commit to a loan modification before the heir agreed to become personally obligated. In other words, the loan servicer said “If Daughter formally agrees to become personally obligated on the loan, we will then *consider* a modification.” My response included indignant laughter and (with client’s approval) a professional commentary similar in theme to “When pigs fly.” Under almost no circumstances would I advise a client to become personally obligated on a loan unless that came along with a guaranteed outcome which suited the client’s wants and needs.

Does the Creditor have to Evaluate the Heir’s Ability to Repay the Loan?>

In general, mortgage lenders are required to evaluate someone’s ability to repay (“ATR”) the loan in determining whether to allow that person to assume the mortgage loan, similar to the evaluation a loan applicant would be put through when seeking a loan to purchase real property. However, because many new owner heirs have traditionally failed such evaluations, and at least certain aspects of the federal government wanted to change that, the CFPB has formally distinguished an heir becoming obligated on the mortgage loan versus an assumption of the loan by someone in a different scenario. Heirs who come to own real property due to death of the previous owner and then seek to modify a loan are not subject to the ATR rule.

If Daughter wanted to modify the loan, and Questionable Loan Servicing, LLC (acting on behalf of the loan note-holder) wanted her to become obligated as a borrower on the loan in exchange for modified loan terms and the loan being considered back in good standing, the ATR rule need not be considered and need not serve as an obstacle. Daughter would not be “assuming” the loan for purposes of the ATR rule, although what she would be doing very much looks, sounds, and smells like an assumption and would be considered one in almost any other context.

Best Practices for Heirs (and their Representatives)

Heirs should act assertively and persistently when dealing with mortgage loan servicers and other creditor-side entities instead of passively waiting for the servicer to guide the heir forward. The more information the heir can obtain about the status of the mortgage loan and related options, and the more quickly the heir can obtain this information, the better-positioned the heir is to make decisions. If the overall circumstances indicate that the heir can’t afford the loan (perhaps even as potentially modified or refinanced) and/or if the heir doesn’t want to keep the property, it may be best to sell it “now” – before making payments toward the loan or at least before a delinquency eats further away at any equity.

Jason McGrath of Charlotte is licensed in three states, and his law firm McGrath and Spielberger, PLLC focuses on real property and business law matters in the Carolinas.


Published by the Real Property Section of the North Carolina Bar Association  •  May 2018  •  www.ncbar.org

Reverse Mortgages and the Foreclosure Process in North Carolina

Article written by Attorney Mike Spicer.

Reverse mortgages have grown in popularity in recent years and some retirees are using them as part of a retirement plan. This post explains some of the unique issues that arise when lenders try to proceed with a reverse mortgage foreclosure in North Carolina.

In a traditional residential foreclosure, the lender typically proceeds based upon a default in payments. In other words, the borrower is behind in the monthly payments and has not brought the loan current after a request to do so. In a reverse mortgage, the borrower does not make monthly payments, so the reason for default is different. Under North Carolina General Statute 53-267, there are six different ways that a lender can establish a default in the reverse mortgage. Those six triggering events are as follows:

1. Borrower fails to maintain the property; or
2. Borrower sells the property or conveys title to a third party; or
3. Death of the borrower and no surviving spouse uses the property as a primary residence; or
4. Borrower fails to reside in the property as the primary residence for a period of twelve (12) consecutive months due to a physical or mental illness; or
5. For reasons other than physical or mental illness, borrower fails to use the property as the primary residence for a period of 180 consecutive days, and the property is not used as the primary residence of at least one other borrower, and the lender has not given written permission to abandon the property as the primary residence; or
6. Borrower fails to maintain property taxes, property insurance, and/or property assessments.

McGrath & Spielberger PLLC have found that a fair number of reverse mortgage foreclosures are filed because of simple oversight. For example, reverse mortgage lenders send out a notice once a year asking the borrower to certify that the property is still being used as a primary residence. If this form is not completed and sent back to the lender, a default notice may be mailed for failure to occupy the property as the primary residence. The borrower may be living in the home and still get a notice that the loan is in default. Other common issues arise regarding property taxes and payment of insurance premiums. In many cases, these payments have been made but the lender is not aware. Good record keeping can help the borrower in many of these situations.

Even though there are more ways for a reverse mortgage to be declared in default, North Carolina does offer the borrower some protection not offered in a typical residential foreclosure. One such example of this is found in North Carolina General Statute 53-268. This statute requires a lender to provide at least ninety (90) days’ notice to a borrower before initiating a foreclosure. The traditional mortgage foreclosure brought under Chapter 45 of the North Carolina general statutes permits half that time. In addition to any requirements under state law, a large percentage of reverse mortgages are backed, owned, or controlled by investors that require additional steps to be taken by a lender before foreclosing on a reverse mortgage.

If you are a senior and find yourself in the unfortunate situation of defending against a foreclosure of a reverse mortgage, it is important to seek the advice of an attorney that understands these issues to make sure your rights are protected. The highly skilled and experienced team of attorneys at McGrath & Spielberger, PLLC are here to help when you need legal assistance. If you are facing a reverse mortgage foreclosure or have been sent a notice of default for a reverse mortgage, please complete our confidential client intake form today. 

Arbitration versus Mediation

Although arbitration and mediation can both resolve lawsuits, they are quite different and it is important for parties to lawsuits to understand how each procedure works. In this video, Attorney Jason McGrath – who has been a trial lawyer for over 19 years and has been involved in mediations and arbitrations – explains the difference between the two.


Follow this link to watch the video on YouTube, https://youtu.be/psEknpr5jXM

We hope you have enjoyed this informative video from McGrath & Spielberger PLLC. Our highly skilled and experienced business and contract lawyers are here to help when you need legal assistance. If you are facing a lawsuit, please fill out our confidential client intake form for legal assistance.

 

Schedule your legal consultation with Attorney Jason A. McGrath today!

Commercial Leases in South Carolina Amid the Covid-19 Coronavirus Pandemic

At McGrath and Spielberger, PLLC, we represent many local and regional clients who own and operate many different types of businesses, including restaurants, gyms, retail stores, and other commercial businesses, throughout North Carolina, South Carolina, Florida, Georgia, Ohio and Tennessee. We are obviously hearing a lot from our clients right now regarding their issues and concerns in relation to the Covid-19 coronavirus pandemic. Overwhelmingly, most client inquiries relate to commercial leases in which our clients are tenants. Their main questions typically revolve around their requirement to pay rent and whether they can be held in default and/or evicted during the pandemic.

This article will focus on the answers to these question in relation to commercial leases in South Carolina specifically, but a lot of what is discussed may also apply in other states. As of now, without an explicit agreement with the landlord under the lease regarding payment of rent during this pandemic, there are “simple” answers and “practical” answers that either now exist or that will eventually reveal themselves. Please also note that the answers to the above questions are fluid and may be affected by forthcoming government relief programs and bailouts.

Do I have to pay rent?

Simple Answer: Yes.

Practical Answer: Still yes unless some sort of law is passed allowing commercial tenants to stop paying rent for a period of time, unless your landlord has specifically told you your rent will be abated, or unless your lease agreement has an applicable Force Majeure clause or other clause which would relieve your obligation to pay rent (Click here for a brief summary of what a Force  Majeure clause is). As of now, there have been no Federal or state orders issued or laws passed that currently allow tenants to stop paying rent or requiring landlords to provide any type of rent relief.

Can I be held in default and/or evicted during the Covid-19 coronavirus pandemic?

Simple Answers: Held in default, yes. Evicted, probably not for the immediate future.

Practical Answer: Again, still yes for default. As far eviction goes, though, when you can or will actually be evicted or ruled by a court to be in default is somewhat up in the air and it likely won’t be before May 1, 2020. On March 18, 2020, the South Carolina Supreme Court issued an order stating, in part, “. . . that all evictions currently ordered and scheduled statewide shall be rescheduled for a date not earlier than May 1, 2020.”  While this order does not specifically differentiate between commercial and residential leases, the lack of such differentiation bolsters an argument that the order applies to all leases, both commercial and residential. And despite some public perceptions to the contrary, the order does not state in any way whatsoever that tenants in commercial leases are excused from paying rent, that landlords cannot add late fees, penalties and interest to late or unpaid rent payments, or that landlords can’t hold tenants in default or file to evict them for not paying rent or otherwise violating their leases. It simply means that virtually no eviction hearings will be heard in court prior to May 1, 2020. It should also be noted that South Carolina law does not necessarily require a landlord to file an eviction action to remove a tenant – in some cases “self-help” evictions are allowed. However, they are rarely utilized because they pose many risks to and are wrought with pitfalls for landlords trying to utilize them. So, practically, if you fail to pay your rent or otherwise violate the terms of your lease, you are unlikely to be physically evicted or ejected from your leased space prior to May 1, 2020, and probably much later due to the backup of cases that will result from the order. But you can still be in default of your lease and may be liable for past due rent, penalties, late fees, interest and other damages suffered by your landlord due to your failure to pay rent or comply with other provisions of your lease.

So, if you cannot pay your rent due to the Covid-19 coronavirus pandemic, or for any other reason, we highly recommend you first discuss it with an attorney. It may be that approaching your landlord and reaching an agreement that works for both of you is the best approach, or it may be that your specific situation requires more complex and/or drastic steps. If you are located in one of the jurisdictions in which McGrath and Spielberger has licensed attorneys, please contact us and we would be happy to assist you analyze your situation and form a plan that will allow your business to survive during these unprecedented times. You can click here, email us at info@mcgrathspielberger.com, or call us at 800.481.2180.

McGrath and Spielberger, PLLC handles business law, contract law and commercial lease matters every day, and has lawyers who are licensed to practice in FL, GA, NC, OH, SC, and TN (if you are unsure as to what jurisdiction applies to your legal matter, we can help make that determination).

Coronavirus, Force Majeure, and Your Business Contract – Will the Charlotte Hornets and Other NBA Players Be Paid?

The coronavirus (more formally known as COVID-19) is now impacting every part of life. In our last blog post, we discussed general issues on how coronavirus might impact your business contract, and pointed out that the effects of this disease are impacting whether people are getting paid. The NBA just suspended its games for the immediate future - what about NBA players while the National Basketball Association’s games are suspended? Are Mr. Michael Jordan and the Charlotte Hornets obligated to pay players like Devonte Graham, Terry Rozier, Dwayne Bacon, and PJ Washington? Must the Warriors provide contractual wages to Steph Curry? Let’s explore how we might find the answers.

What contract controls the relationship between the National Basketball Association and its teams like the Boston Celtics on the one side and players like Kemba Walker on the other? The relationship between the NBA, the teams, and the players is generally governed by contract law, and specifically a business contract almost 600 pages long titled the “Collective Bargaining Agreement” (the “CBA”).

What key part of the CBA might largely control what happens in these coronavirus-induced circumstances? What immediately comes to mind is whether there is a “Force Majeure” clause somewhere in those many pages of fine legal verbiage. Click here for a brief recap of what a Force Majeure clause is; in essence, some unusual, significant condition beyond the control of a contractual party which interferes with that party’s ability to perform duties under the contract. Yep, on page 467 is “Section 5: Termination by NBA/Force Majeure”.

Is something like COVID-19 addressed in the CBA under the Force Majeure clause? Notably, the list of Force Majeure items in the NBA’s contract with the National Basketball Players Association [sic] does include “epidemics”. That term is not defined specifically in the CBA, which means we’d typically look to the standard definition, perhaps influenced by what definitions relevant courts of law have accepted over time. “Epidemic: a disease affecting many persons at the same time, and spreading from person to person in a locality where the disease is not permanently prevalent.” Very few reasonable minds would disagree that coronavirus is an epidemic in the United States right now (and in Canada to a certain extent, let’s not forget the reigning NBA champion Toronto Raptors).

You should also know that the Collective Bargaining Agreement – which, again, is a business contract - allows the NBA to terminate that contract after a Force Majeure event.

So does coronavirus mean that the NBA doesn’t have to pay the players while games are suspended? There may be an epic battle over that very question.  The CBA specifically states that if a Force Majeure event (like coronavirus – an “epidemic”) occurs and causes teams not to be able to play one or more games, and those games are not made up, each player who was part of that team shall have his overall compensation for that season reduced by 1.08%. (In the contract it’s actually expressed as a fraction – 1/92.6th, based on an agreement that for this purpose a season is made up of 92.6 games.)

Interestingly, this part of the CBA specifically states that neither the NBA nor the Players Association must terminate the contract even if it has the right to do so, including as to the NBA’s right to cancel the CBA due to this Force Majeure event. However, there is not similar language which specifically addresses whether the NBA has the option to reduce compensation to the players under a Force Majeure circumstance. Thus we are left with language mentioned in the previous paragraph (and in the CBA itself, the previous page) which says that the players’ compensation “shall” be reduced.

If I was arguing for non-payment, I’d argue that the contract doesn’t allow the teams to pay the players in these circumstances even if the teams wanted to. The players, presumably, would argue that a contractual party always has the right not to enforce one of its rights, and thus the teams could of course pay the players if they so choose. Also, there are certainly other aspects of this 598-page contract, governed by New York and/or Federal law, which influence these legalities, and this article is not attempting to engage in a detailed analysis of this issue and is not attempting to interpret or comment on New York law.

This NBA stuff is interesting, but what about my business? Can your lawyers help my company deal with contract issues? Yes, that’s what we do. We explore, we troubleshoot, we diagnose, we advise, we repair, we resolve, we combat, whichever is appropriate. If you want help and the subject matter and the jurisdiction (which state, etc.) match up with those of our Firm, reach out to us and ask for a consultation; one way to do so is by clicking here. Good luck and keep yourself – and your business – safe!

McGrath and Spielberger, PLLC handles business law and contract law matters every day, and has lawyers who are licensed to practice in FL, GA, NC, OH, SC, and TN (if you are unsure as to what jurisdiction applies to your legal matter, we can help make that determination).

Coronavirus, Force Majeure, and Your Business Contract Explained

Coronavirus (more formally known as COVID-19) is now impacting every part of life. Let’s start figuring out if and how it impacts your business law contract, initially by asking and answering these fundamental questions that are being posed. 

1.     Practically, how might the coronavirus impact my business agreement?
2.     How could something like the coronavirus be covered in my business law contract?
3.     Are we talking about “Acts of God?”
4.     How do I know if the “Force Majeure” principle applies to my business agreements?
5.     What do I do if my business’ rights or duties are significantly impacted by COVID-19?
6.     Can your lawyers help my company deal with this now and make improvements for the future?

  Practically, how might the coronavirus impact my business agreement? You’re probably paying for a product or service, or being paid for a product or service – or both being paid and paying. Supply chains are interrupted, resources are interfered with, money is short. This pandemic is devastating across the entire spectrum of the commercial world in addition to our personal worlds. You may suddenly not be able to fulfill your normal contractual duties to supply, not be able to pay, or not be getting paid.

How could something like the coronavirus be covered in my business law contract? Probably by way of what is usually called a “Force Majeure” clause. This type of provision, found in most well-drafted business law agreements, typically excuses a contractual party from performing its duties, in part or in whole, for a temporary time without being in breach of the contract, if the non-performance is due to the Force Majeure cause / event.

Are we talking about “Acts of God?” Yes, no, and/or maybe. (Great lawyer answer, right? In all seriousness, in some ways the answer to this question somewhat depends on one’s religious beliefs.) “Back in the day” Force Majeure contractual clauses were often referred to as “Acts of God” clauses. Now, many contracts which have Force Majeure clauses include in the list of possible events/causes the words “acts of God”. For example, you might be excused from performing your duties to the extent that you cannot reasonably perform them due to “hurricanes, labor strikes, power outages, acts of God…,” etc. But Force Majeure clauses, as you can see, typically include many more events/causes than “acts of God” alone.

How do I know if the “Force Majeure” principle applies - or could apply - to my business agreements? Could the Force Majeure principle apply to your contracts? If the contract has such a clause, then yes. The answer can somewhat be ‘yes’ even if you don’t have such a clause, but that’s a sub-topic for a different article. Does this principle apply to your business contract? If it has a Force Majeure clause and if there are Force Majeure type causes/events interfering with the performance of the contract, then yes it likely applies. (Please understand we aren’t saying that the clause applies in your exact situation, which is not known to us, and please understand we aren’t giving legal analysis about any specific situation – each specific situation depends on an analysis of the specific facts involved.)

What do I do if my business’ rights or duties are significantly impacted by COVID-19? For one thing, find out if there is a Force Majeure contract clause which may apply. If there is, ask a lawyer to analyze your situation. Even if there isn’t, ask a lawyer to analyze your situation. Practically, it also makes sense to consider communicating with your contractual partners to alert them to the challenging circumstances, whether those circumstances may cause you to be unable to perform or you fear that they may cause another party to fail to perform, or both, and see what cooperative measures can be agreed upon, or at least level-set expectations and confirm present-day realities.

Can your lawyers help my company deal with this now and make improvements for the future? That’s what we do. We explore, we troubleshoot, we diagnose, we advise, we repair, we resolve, we combat – whatever the situation calls for. If you want help and the subject matter and the jurisdiction (which state, etc.) match up with those of our Firm, reach out to us and ask for a consultation; one way to do so is by clicking here. Good luck and keep yourself – and your business – safe!

McGrath and Spielberger, PLLC handles business law and contract law matters every day, and has lawyers who are licensed to practice in FL, GA, NC, OH, SC, and TN (if you are unsure as to what jurisdiction applies to your legal matter, we can help make that determination). 
 

Mecklenburg County “Stay at Home” Order: the County’s News release, FAQ, and Order Itself

   ⦿ Mecklenburg County's News Release for Order
   ⦿ Frequently Asked Questions
   ⦿ County's "Stay at Home" Orders - Full Text
   ⦿ Take our Survey

County Issues 'Stay at Home' Order for Next 21 Days - released 3/24/2020

As the number of COVID-19 cases continue to rise in Mecklenburg County, the Charlotte- Mecklenburg Emergency Management Office has announced a Stay-at-Home order for County residents. The order will go into effect on Thursday, March 26 at 8:00 a.m. and will remain in effect until April 16, 2020.

The order was announced Tuesday afternoon by Mecklenburg County Manager Dena Diorio during the Board of County Commissioners Budget and Public Policy meeting.

The order will require County residents to remain in their homes for the next 21 days in an attempt to reduce the number of new COVID-19 infections within the County. Exceptions will be allowed for those seeking medical treatment, buying food or exercising outdoors.

Essential workers, including hospital and medical staff, pharmacy employees, law enforcement, firefighters, EMS Agency (MEDIC), some government employees and food service and grocery store employees will be allowed to travel to work. There are also many other essential business operations that can continue to operate.

“As we said from the beginning, we must act based on what we are seeing on the ground in our community,” said Harris. “Mecklenburg County has far more cases than any other County in North Carolina, and this extra step will keep more people away from each other and begin to flatten the rate of new cases before the hospital system becomes overwhelmed.”

The order will be enforced by Charlotte-Mecklenburg Police Department and the police departments of the six towns in Mecklenburg County.

The order will not prohibit restaurants from providing take out or delivery options. It also does not prohibit daycares, homeless shelters and government agencies from operating.

For more information on the Stay-at-Home order including frequently asked questions, and a complete list of essential services, visit MeckNC.gov/covid-19.

Mecklenburg County COVID-19 Stay at Home Order– Frequently Asked Questions

What does this order mean?

It means that movement is restricted for all residents of Mecklenburg County to stay at their place of residence except that they may leave to provide or receive essential services or engage in essential activities and work for essential businesses and government services. 
It restricts travel upon public streets, alleys, or roadways or other property except by those in need of medical assistance, food or other commodity or service necessary to sustain the well-being of themselves or their families or some member thereof.  

What is the purpose/goal of this order?

To ensure the maximum number of people self-isolate in their places of residence to the maximum extend feasible, while enabling essential services to continue to slow the spread of COVID-19 to the maximum extent possible.  

How does this order change the previous executive order prohibiting mass gatherings of 50 people or more?

This Proclamation supersedes the restrictions outlined the Public Health Order to Restrict Mass Gatherings, which prohibited mass gatherings of 50 people or more.  

What is and not allowed?

YOU CAN 
• Go to the grocery, convenience or warehouse store 
• Go to the pharmacy to pick up medications and other healthcare necessities 
• Visiting a health care professional for medical services that cannot be provided virtually (call first) 
• Go to a restaurant for take-out, delivery or drive-thru 
• Care for or support a friend or family member 

• Take a walk, ride your bike, hike, jog and be in nature for exercise – just keep at least six feet between you and others 
• Walk your pets and take them to veterinarian if necessary 
• Help someone to get necessary supplies 
• Receive deliveries from any business which delivers  

YOU SHOULD NOT 

• Go to work unless you are providing essential services as defined by this Order
• Visit friends and family if there is no urgent need 
• Maintain less than 6 feet of distance from others when you go out 
• Visit loved ones in the hospital, nursing home, skilled nursing facility or other residential care facility, except for limited exceptions as provided on the facility websites 
• Travel except for essential travel and activities  

What is the difference between “Stay at Home” and “social distancing”? Stay at home is a stricter form of social distancing. Stay at home means: 

• Stay home (stay unexposed and do not expose others) 
• Only go out for essential services 
• Stay 6 feet or more away from others 
• Don’t gather in groups 

When will this order be lifted?

The order is valid through April 16, 2020 but will be regularly reviewed and evaluated and can be revised, amended, or extended based on recommendations from Mecklenburg County Public Health Director and/or Charlotte-Mecklenburg Emergency Management.  

Activities and businesses/travel that are considered essential.

Activities that are considered essential. 

• For health and safety  

• To get necessary supplies and services 

• For outdoor activities (walking, hiking, golfing, running, cycling, using greenways) 

• For work for essential businesses/operations 

• To take care of others

Businesses and types of work are considered essential. 

• Healthcare, public health, law enforcement, public safety and first responders 

• Food, beverages, and agriculture (manufacturing, production, processing, cultivation including farming, livestock, fishing, baking, distribution of animals and good for consumption, providing food, shelter, and other necessities for animals) 

• Stores that sell groceries and medicine 

• Organizations that provide charitable and social services (businesses and religious and secular nonprofit organizations including food banks, when providing food and shelter, social services, and other necessities for life for economically disadvantaged or needy individuals, individuals who need assistance, and people with disabilities). 

• Energy 

• Water and wastewater 

• Transportation and logistics 

• Public works  

• Communication and information technology 

• Media 

• Gas stations and businesses needed for transportation (gas stations and auto-supply, auto-repair, and related facilities and bicycle shops and related facilities) 

• Financial institutions (banks, currency exchange, consumer lenders, including but not limited, to payday lenders, pawnbrokers, consumer installment lenders and sales finance lenders, credit unions, appraisers, title companies, financial markets, trading and future exchanges, affiliates of financial institutions, entities that issue bonds, related financial institutions, and institutions selling financial products) 

• Hardware and supply stores 

• Critical trades (building and construction – plumbers, electricians, exterminators, cleaning and janitorial staff for commercial and governmental properties, security staff, operating engineers, HVAC, painting, moving and relocation services, and other service providers who provide services that are necessary to maintaining the safety, sanitation, and essential operation of residences, essential activities, and essential businesses) 

• Mail, post, shipping, logistics, delivery, and pick-up services (post offices and other businesses that provide shipping and delivery services, businesses that ship or deliver groceries, food, goods or services to end users or through commercial channels)
• Laundry services 

• Restaurants for consumption off-premises (in-house delivery, third-party deliver, drive-through, curbside pick-up, and carry-out) 

• Supplies to work from home  

• Supplies for essential businesses and operations (see #14 in the order for details) 

• Transportation (airlines, taxis, public transportation, vehicle rental, logistics) 

• Home-based care and services (home-based care for adults, seniors, children, people with disabilities) 

• Residential facilities and shelters 

• Professional services (legal, accounting, insurance, real estate, restricted to appraisal and title services) 

• Childcare centers (for specific employees – first responders, healthcare workers, public health, etc) 

• Manufacture, distribution, and supply chain (see #20 for details) 

• Hotels and motels  

• Funeral services 

• Other community-based government operations and essential functions including human services 

• Other community-based human service operations 

• Critical manufacturing 

• Hazardous materials 

I live outside of Mecklenburg County. How does this affect me?

If you work in Mecklenburg County, then your business/employer must comply with this order. You are allowed to travel through Mecklenburg County and conduct essential activities within Mecklenburg County and to return home.  

What are minimum basic operations?

The minimum necessary activities to maintain the value of the businesses’ inventory, preserve the condition of the business’s physical plant and equipment, ensure security, process payroll and employee benefits, or for related functions. 

The minimum necessary activities to facilitate the employees of the business being able to continue to work remotely from their residences.  

What is considered essential travel?

• Any travel related to the provision of or access to essential activities, essential governmental functions, essential businesses and operations, or minimum basic operations. 

• Travel to care for elderly, minors, dependents, persons with disabilities, or other vulnerable persons 

• Travel to or from education institutions for purposes of receiving materials for distance learning, for receiving meals, and other related services

• Travel to return to a place of residence from outside the jurisdiction

• Travel required by law enforcement or court order, including to transport children pursuant to a custody agreement

• Travel required for non-residents to return to their place of residence outside the County. Individuals are strongly encouraged to verify that their transportation out of the County remains available and functional prior to commencing such travel  

Am I allowed to travel?

You are allowed to travel for purposes of essential business and essential activities 

Am I allowed to go outside to exercise? 

Yes – but maintain social distancing of at least 6 feet from all others.

What are the requirements for social distancing?

Required measures include: 

• Designate 6 foot distances 

• Hand sanitizer and sanitizing products 

• Separate operating hours for vulnerable populations 

• Online and remote access

Enforcement Activities

Can I get arrested for violating this order?

CMPD is continuing to enforce the order through education, dialogue, and seeking voluntary cooperation from all residents and businesses. If voluntary cooperation is not achieved CMPD is equipped to enforce these restrictions through citations or misdemeanor charges.  

Any person violating any prohibition or restriction imposed by this order shall be guilty of a Class 2 misdemeanor in accordance with G.S. 14-288.20A. 

How do I report a violation of this order?

Call 3-1-1 or visit the City of Charlotte’s website – see the COVID-19 updates page 

I live in (Huntersville/Cornelius/Davidson/Pineville/Matthews/Mint Hill) – does this order apply to me?

Yes – this order applies to all residents within Mecklenburg County 

Does this order apply to the homeless?

No – homeless are exempt from this restriction but are urged to find shelter.  

Non-essential business and travel

What does this mean for non-essential businesses?

Non-essential business and operations must cease – all businesses and operations in the County, except Essential Businesses and Operations are to cease all activities within the County except minimum basic operations. Businesses may continue operations consisting exclusively of employees or contractors performing activities at their own residences (i.e., working from home).  

The order says I am allowed to go outside – can I take my children to parks/amusement centers? 

All places of public amusement where people may gather, whether indoors or outdoors, including but not limited to, locations with amusement rides, carnivals, amusement parks, water parks, aquariums, zoos, museums, arcades, fairs, children’s play centers, playgrounds, recreation centers, funplexes, theme parks, bowling alleys, movie and other theaters, concert and music halls, and country clubs or social clubs shall be closed to the public.

Can I visit a loved one in a hospital/nursing home/etc.?

Owners, administrators, operators, staff, contractors, and volunteers of nursing homes, long term care and assisted living facilities are prohibited from allowing a person to enter the facility and visit a resident unless each of the following criteria are met: (1) the visitor is an adult; (2) the resident has not already had a visitor that day; and (3) the visit takes place in the resident’s room. This prohibition does not apply to end of life situations. 

Mecklenburg County "Stay at Home" Orders Text

REVISED JOINT  PROCLAMATION OF THE CHAIRMAN OF THE MECKLENBURG COUNTY BOARD OF COMMISSIONERS AND MAYOR OF THE CITY OF CHARLOTTE IN CONSULATION WITH THE MECKLENBURG COUNTY PUBLIC HEALTH DIRECTOR IN CONJUNCTION WITH THE DIRECTOR OF THE OFFICE OF THE CHARLOTTE MECKLENBURG EMERGENCY MANAGEMENT DEPARTMENT  

 RESTRICTING MOVEMENT OF ALL INDIVIDUALS LIVING WITHIN MECKLENBURG COUNTY, THE CITY OF CHARLOTTE AND THE TOWNS OF MATTHEWS, PINEVILLE, MINT HILL, DAVIDSON, HUNTERSVILLE, AND CORNELIUS TO  STAY AT THEIR PLACE OF RESIDENCE EXCEPT THAT THEY MAY LEAVE TO PROVIDE OR RECEIVE CERTAIN ESSENTIAL SERVICES OR ENGAGE IN CERTAIN ESSENTIAL ACTIVITIES AND WORK FOR ESSENTIAL BUSINESSES AND GOVERNMENTAL SERVICES;  

EXEMPTING INDIVIDUALS EXPERIENCING HOMELESSNESS FROM THE  RESTRICTION BUT URGING THEM TO FIND SHELTER;  

 RESTRICTING ALL BUSINESSES AND GOVERNMENTAL AGENCIES TO CEASE NON-ESSENTIAL OPERATIONS REQUIRING PUBLIC MOBILITY WITHIN THE LOCATIONS WITHIN THE COUNTY;  RESTRICTING ALL NON-ESSENTIAL GATHERINGS OF INDIVIDUALS; AND  ALL NON-ESSENTIAL TRAVEL 

     WHEREAS, The North Carolina General Assembly has adopted Article 1A of Chapter 166A of the General Statutes, entitled “North Carolina Emergency Management Act”, which sets forth the authority and responsibility of the Governor, State agencies, and local governments in prevention of, preparation for, response to, and recovery from natural or man-made emergencies; and 

    WHEREAS, G.S. §166A-19.22, which is part of the North Carolina Emergency Management Act, authorizes counties to declare a state of emergency under conditions and following procedures contained in G.S. §166A-19.22; and

   WHEREAS, the Coronavirus (COVID-19) pandemic has created a state of emergency in the County of Mecklenburg and the City of Charlotte; and

    WHEREAS, the Governor has declared a state of emergency on behalf of the state of North Carolina on March 10, 2020; and

    WHEREAS, Mecklenburg County in conjunction with the City of Charlotte and six towns within the County signed a Joint Declaration of Emergency on 13 March 2020; and
   
    WHEREAS, among other things the Declaration restricted access and travel upon public streets, alley, or roadway or upon any other public property within the area(s) or times as designated by the Mecklenburg County Public Health Department in conjunction with CityCounty Emergency Management except by those in  search of medical assistance, food or other commodity or service necessary to sustain the well-being of themselves or their families or some member thereof; and

    WHEREAS, the Declaration further restricted movement of people in public places and the operation of business activity, entertainment, events or other places of mass gatherings as reasonably necessary to overcome or prevent further aggravation of the emergency, and any other activities or conditions whereby the control of which maybe be reasonably necessary to maintain order and protect lives or property during the state of emergency, except in areas or times designated by the Mecklenburg County Health Department in conjunction with Emergency Management, and 

    WHEREAS, since execution of the Declaration, residents of the county have been tested for the COVID-19 virus. Initially, there was a connection and correlation between positive results and out of county travel or contact with someone known or believed to have been positive; however as of March 23, 2020 there  108 cases COVID-19 in the County, as well as increasing evidence of cases in neighboring counties, including a significant and increasing number of suspected cases of community transmission and likely further significant increases in transmission. Widespread testing of COVID-19 is not yet available but is expected to increase in the coming days. This Joint Declaration and Order is necessary to slow the rate of spread; and 

    WHEREAS, scientific evidence and best practices regarding the most effective approaches to slow the transmission of communicable diseases generally and COVID-19 particularly, and evidence that age, condition and health of a significant portion of the population of the County, the City of Charlotte and surrounding Towns places the population at risk of serious health complications, including death from COVID-10; and

    WHEREAS, many individuals who contract the virus display no symptoms or have mild symptoms which means they may not be aware they carry the virus. People without symptoms can transmit the disease and because evidence shows the disease is easily spread, mass gatherings can result in further transmissions of the virus; and

    WHEREAS, it is essential to slow viral transmission as  much as possible to protect the most vulnerable and to prevent the health care system from being overwhelmed; and

    WHEREAS, this Revised Joint Order and Declaration is necessary to slow the rate of the spread and is the least restrictive based upon the current evidence. 

NOW THEREFORE BE IT FURTHER ORDAINED THAT: 

This Joint Proclamation  is to ensure that the maximum number of people self-isolate in their places of residence to the maximum extent feasible, while enabling essential services to continue to slow the spread of COVID-19 to the maximum extent possible. When people need to leave their places of residence, whether to obtain or perform essential services, or to otherwise facilitate authorized activities necessary for continuity of social and commercial life, they should at all times reasonably comply with CDC recommendations of Social Distancing Requirements of at least six (6) feet apart. Individuals whose residences are unsafe or become unsafe, such as victims of domestic violence, are permitted and urged to leave their home and stay at a safe alternative location. For purposes of this Proclamation, homes or residences include hotels, motels, shared rental units, shelters, and similar facilities. All provisions of this  Proclamation should be interpreted to effectuate this intent.   

All individuals currently living within Mecklenburg County including the City of Charlotte and the named Towns are  restricted to shelter at their places of residence. All persons may leave their residences only for Essential Activities, Essential Governmental Functions, or to operate Essential Business (as defined below). All Essential Businesses are strongly encouraged to remain open. To the greatest extent feasible, Essential Businesses shall comply with Social Distancing  requirements as defined by CDC.

Non-essential business and operations must cease. All businesses and operations in the County, except Essential Businesses and Operations as defined below, are  to cease all activities within the County except Minimum Basic Operations, as defined below. Businesses may continue operations consisting exclusively of employees or contractors performing activities at their own residences (i.e., working from home).

Prohibited activities. All public and private gatherings of more than 10 people are prohibited, except for the limited purposes permitted by this Proclamation . Nothing   herein prohibits the gathering of members of a household or residence.

All places of public amusement where people may gather, whether indoors or outdoors, including but not limited to, locations with amusement rides, carnivals, amusement parks, water parks, aquariums, zoos, museums, arcades, fairs, children’s play centers, playgrounds, recreation centers, funplexes, theme parks, bowling alleys, movie and other theaters, concert and music halls, and country clubs or social clubs shall be closed to the public.

This   Proclamation supersedes the restrictions outlined in the Public Health Order to Restrict Mass Gatherings, which prohibited gatherings of 50 people or more.

Restrictions on nursing homes, long term care facilities and assisted living facilities operated pursuant to Article 6 of NC General Statute Chapter 131E: 

a. Owners, administrators, operators, staff, contractors, and volunteers of nursing homes, long term care and assisted living facilities are prohibited from allowing residents, customers, clients, or visitors from assembly in spaces that do not permit appropriate social distancing which consists of separation of 6 feet or more between each individual. 

b. Owners, administrators, operators, staff, contractors, and volunteers of nursing homes, long term care and assisted living facilities are prohibited from allowing a person to enter the facility and visit a resident unless each of the following criteria are met: (1) the visitor is an adult, (2) the resident has not already had a visitor that day; and (3) the visit takes place in the resident's room. This prohibition does not apply to end of life situations. 

c. No person is allowed to visit a resident of a nursing home, long term care or assisted living facility unless the visitor has been screened prior to entry for signs and symptoms of COVID-19 including the following: fever of 100.4 or higher, cough, or difficulty breathing, contact in past 14 days with a person who has a confirmed diagnosis of COVID-19 or who is under investigation for COVID-19. All visitors may be required to take precautionary measures including, but not limited to, social distancing or wearing personal protective equipment. 

d. No person is allowed to visit a resident of a nursing home, long term care or an assisted living facility unless the visitor shows identification, signs into a visitor's log that includes the date and time in and time out , and provide their name and contact information including phone number and email if available. 


e. Operators and staff of nursing homes, long term care and assisted living facilities are prohibited from destroying each day's visitor log for a period of 30 days from that day. 

f. Owners, administrators and operators shall ensure adequate staffing to manage all occupants of the facility to include lifting and moving uninjured occupants.


Prohibited and permitted travel. All travel, including, but not limited to, travel by automobile, motorcycle, scooter, , train, plane, or public transit, except Essential Travel and Essential Activities as defined herein or otherwise defined in this Proclamation, is prohibited. People riding on public transit must comply with Social Distancing Requirements to the greatest extent feasible. This  Proclamation allows travel into or out of the County to maintain Essential Businesses and Operations and Minimum Basic Operations.   

   1. Leaving the home for essential activities is permitted. For purposes of this  Proclamation, individuals may leave their residence only to perform any of the following Essential Activities:

1.          For health and safety. To engage in activities or perform tasks essential to their health and safety, or to the health and safety of their family or household members (including, but not limited to, pets), such as, by way of example only and without limitation, seeking emergency services, obtaining medical supplies or medication, or visiting a health care professional for medical services that cannot be provided virtually. 
2.         For necessary supplies and services. To obtain necessary services or supplies for themselves and their family or household members, or to deliver those services or supplies to others, such as, by way of example only and without limitation, groceries and food, household consumer products, supplies they need to work from home, and products necessary to maintain the safety, sanitation, and essential operation of residences.
3.         For outdoor activity. To engage in outdoor activity, provided the individuals comply with Social Distancing Requirements, as defined herein, such as, by way of example and without limitation, walking, hiking, golfing, running,  cycling, or using the greenways. Individuals may go to public parks and open outdoor recreation areas. However, playgrounds may increase spread of COVID-19, and therefore shall be closed.
4.         For certain types of work. To perform work providing essential products and services at Essential Businesses or Operations (which, as defined below, includes Healthcare and Public Health Operations, Human Services Operations, Essential Governmental Functions, and Essential Infrastructure) or to otherwise carry out activities specifically permitted in this Executive Order, including Minimum Basic Operations.
5.         To take care of others. To care for a family member, friend, or pet in another household, and to transport family members, friends, or pets as allowed by this Executive Order.

    2. Elderly people and those who are vulnerable as a result of illness should take additional precautions. People at high risk of severe illness from COVID-19, including elderly people and those who are sick, are urged to stay in their residence to the extent possible except as necessary to seek medical care. Nothing in this  Proclamation prevents the Mecklenburg County Public Health Director from issuing and enforcing isolation and quarantine orders or executing other duties as required pursuant to NCGS 130A

     3. Healthcare and Public Health Operations. For purposes of this Proclamation , individuals may leave their residence to work for or obtain services through Healthcare and Public Health Operations.

Healthcare and Public Health Operations includes, but is not limited to: hospitals; clinics when medical/dental care cannot be provided virtually; pharmacies; public health entities, including those that compile, model, analyze and communicate public health information; pharmaceutical, pharmacy, medical device and equipment, and biotechnology companies (including operations, research and development, manufacture, and supply chain); organizations collecting blood, platelets, plasma, and other necessary materials; reproductive health care providers; home healthcare services providers; mental health and substance use providers; other healthcare facilities and suppliers and providers of any related and/or ancillary healthcare services; and entities that transport and dispose of medical materials and remains.

Specifically included in Healthcare and Public Health Operations are manufacturers, technicians, logistics, and warehouse operators and distributors of medical equipment, personal protective equipment (PPE), medical gases, pharmaceuticals, blood and blood products, vaccines, testing materials, laboratory supplies, cleaning, sanitizing, disinfecting or sterilization supplies, and tissue and paper towel products.

Healthcare and Public Health Operations also includes veterinary care and all urgent healthcare services provided to animals.

Healthcare and Public Health Operations shall be construed broadly to avoid any impacts to the delivery of healthcare, broadly defined. Healthcare and Public Health Operations does not include fitness and exercise gyms, spas, salons, barber shops, tattoo parlors, and similar facilities.

     4. Human Services Operations. For purposes of this  Proclamation, individuals may leave their residence to work for or obtain services that are not available via online or mail-in applications, and telephone interviews at any Human Services Operations, or Medicaid providers that is providing services to the public and including state-operated, institutional, or community-based settings providing human services to the public.

Human Services Operations include, but is not limited to: long-term care facilities; residential settings and shelters for adults, seniors, children, and/or people with developmental disabilities, intellectual disabilities, substance use disorders, and/or mental illness; transitional facilities; home-based settings to provide services to individuals with physical, intellectual, and/or developmental disabilities, seniors, adults, and children; field offices that provide and help to determine eligibility for basic needs including food, cash assistance, medical coverage, child care, vocational services, rehabilitation services; developmental centers; adoption agencies; businesses that provide food, shelter, and social services, and other necessities of life for economically disadvantaged individuals, individuals with physical, intellectual, and/or developmental disabilities, or otherwise needy individuals.

Human Services Operations shall be construed broadly to avoid any impacts to the delivery of human services, broadly defined.

     5. Essential Infrastructure. For purposes of this  Proclamation, individuals may leave their residence to provide any services or perform any work necessary to offer, provision, operate, maintain and repair Essential Infrastructure.

Essential Infrastructure includes, but is not limited to: food production, distribution, and sale; construction (including, but not limited to, construction required in response to this public health emergency, hospital construction, construction of long-term care facilities, public works construction, and housing construction); building management and maintenance; airport operations; operation and maintenance of utilities, including water, sewer, and gas; electrical (including power generation, distribution, and production of raw materials); distribution centers; security system operation and maintenance; oil and biofuel refining; roads, highways, railroads, and public transportation; ports; cybersecurity operations; flood control; solid waste and recycling collection and removal; and internet, video, and telecommunications systems (including the provision of essential global, national, and local infrastructure for computing services, business infrastructure, communications, and web-based services).

Essential Infrastructure shall be construed broadly to avoid any impacts to essential infrastructure, broadly defined.

     6. Essential Governmental Functions. For purposes of this  Proclamation, all first responders, emergency management personnel, emergency dispatchers, court personnel, law enforcement and corrections personnel, hazardous materials responders, child protection and child welfare personnel, adult protection services, housing and shelter personnel, military, and other governmental employees working for or to support Essential Businesses and Operations are categorically exempt.

Essential Government Functions means all services provided by the County or any municipality, township, subdivision or agency of government and needed to ensure the continuing operation of the government agencies or to provide for or support the health, safety and welfare of the public, and including contractors performing Essential Government Functions. Each County, City or Town Manager  shall determine its Essential Governmental Functions and identify employees and/or contractors necessary to the performance of those functions.

This  Proclamation does not apply to the NC State or federal government. Nothing  herein shall prohibit any individual from performing or accessing Essential Governmental Functions.

     7. Businesses covered by this  Proclamation. For the purposes of this  Proclamation, covered businesses include any for-profit, non-profit, or educational entities, regardless of the nature of the service, the function it performs, or its corporate or entity structure.

Essential Businesses and Operations. For  purposes of this  Proclamation, Essential Businesses and Operations means Healthcare and Public Health Operations, Human Services Operations, Essential Governmental Functions, and Essential Infrastructure, and the following:

1. Stores that sell groceries and medicine. Grocery stores, pharmacies, certified farmers’ markets, farm and produce stands, supermarkets, convenience stores, and other establishments engaged in the retail sale of groceries, canned food, dry goods, frozen foods, fresh fruits and vegetables, pet supplies, fresh meats, fish, and poultry, alcohol and nonalcohol beverages and any other household consumer products (such as cleaning and personal care products). This includes stores that sell groceries, medicine, including medication not requiring a medical prescription, and also that sell other nongrocery products, and products necessary to maintaining the safety, sanitation, and essential operation of residences and Essential Businesses and Operations;

2. Food, beverage, and agriculture. Food and beverage manufacturing, production, processing, and cultivation, including farming, livestock, fishing, baking, and other production agriculture, including cultivation, marketing, production, and distribution of animals and goods for consumption; and businesses that provide food, shelter, and other necessities of life for animals, including animal shelters, rescues, shelters, kennels, and adoption facilities;

3. Organizations that provide charitable and social services. Businesses and religious and secular nonprofit organizations, including food banks, when providing food, shelter, and social services, and other necessities of life for economically disadvantaged or otherwise needy individuals, individuals who need assistance as a result of this emergency, and people with disabilities; 4. Media. Newspapers, television, radio, and other media services;

5. Gas stations and businesses needed for transportation. Gas stations and auto- supply, auto-repair, and related facilities and bicycle shops and related facilities;

 6. Financial institutions. Banks, currency exchanges, consumer lenders, including but not limited, to payday lenders, pawnbrokers, consumer installment lenders and sales finance lenders, credit unions, appraisers, title companies, financial markets, trading and futures exchanges, affiliates of financial institutions, entities that issue bonds, related financial institutions, and institutions selling financial products;

7. Hardware and supply stores. Hardware stores and businesses that sell electrical, plumbing, and heating material;

8. Critical trades. Building and Construction Tradesmen and Tradeswomen, and other trades including but not limited to plumbers, electricians, exterminators, cleaning and janitorial staff for commercial and governmental properties, security staff, operating engineers, HVAC, painting, moving and relocation services, and other service providers who provide services that are necessary to maintaining the safety, sanitation, and essential operation of residences, Essential Activities, and Essential Businesses and Operations;

9. Mail, post, shipping, logistics, delivery, and pick-up services. Post offices and other businesses that provide shipping and delivery services, and businesses that ship or deliver groceries, food, goods or services to end users or through commercial channels;

10. Educational institutions. Educational institutions—including public and private pre-K12 schools, colleges, and universities—for purposes of facilitating distance learning, performing critical research related to COVID-19, or performing essential functions, provided that social distancing of six-feet per person is maintained to the greatest extent possible. This Proclamation is consistent with and does not amend or supersede Executive Order, except that affected schools are ordered closed through May 15, 2020 ; Charlotte-Mecklenburg School System remains under the command and control of the superintendent of schools.

11. Laundry services. Laundromats, dry cleaners, industrial laundry services, and laundry service providers;

12. Restaurants for consumption off-premises. Restaurants and other facilities that prepare and serve food, but only for consumption off-premises, through such means as inhouse delivery, third-party delivery, drive-through, curbside pick-up, and carry-out. Schools and other entities that typically provide food services to students or members of the public may continue to do so under this Executive Order on the condition that the food is provided to students or members of the public on a pick-up and takeaway basis only. Schools and other entities that provide food services under this exemption shall not permit the food to be eaten at the site where it is provided, or at any other gathering site due to the virus’s propensity to physically impact surfaces and personal
property;

13. Supplies to work from home. Businesses that sell, manufacture, or supply products needed for people to work from home;

14. Supplies for Essential Businesses and Operations. Businesses that sell, manufacture, or supply other Essential Businesses and Operations with the support or materials necessary to operate, including computers, audio and video electronics, household appliances; IT and telecommunication equipment; hardware, paint, flat glass; electrical, plumbing and heating material; sanitary equipment; personal hygiene products; food, food additives, ingredients and components; medical and orthopedic equipment; optics and photography equipment; diagnostics, food and beverages, chemicals, soaps and detergent; and firearm and ammunition suppliers and retailers for purposes of safety and security;

15. Transportation. Airlines, taxis, public transportation, transportation network providers (such as Uber and Lyft), vehicle rental services, paratransit, and other private, and commercial transportation and logistics providers necessary for Essential Activities and other purposes expressly authorized herein. ;

16. Home-based care and services. Home-based care for adults, seniors, children, and/or people with developmental disabilities, intellectual disabilities, substance use disorders, and/or mental illness, including caregivers such as nannies who may travel to the child’s home to provide care, and other in-home services including meal delivery;

17. Residential facilities and shelters. Residential facilities and shelters for adults, seniors, children, and/or people with developmental disabilities, intellectual disabilities, substance use disorders, and/or mental illness;

18. Professional services. Professional services, such as legal services, accounting services, insurance services, real estate services restricted to appraisal and title services;

19. Childcare centers for specific employees exempted by this  Proclamation. Childcare facilities providing services that enable first responders, healthcare workers, public health, HHS staff and others responding to COVID-19.

20. Manufacture, distribution, and supply chain for critical products and industries. Manufacturing companies, distributors, and supply chain companies producing and supplying essential products and services in and for industries such as pharmaceutical, technology, biotechnology, healthcare, chemicals and sanitization, waste pickup and disposal, agriculture, food and beverage, transportation, energy, steel and steel products, petroleum and fuel, mining, construction, national defense, communications, as well as products used by other Essential Businesses and Operations.

21. Hotels and motels. Hotels and motels, to the extent used for lodging and delivery or carry-out food services.

22. Funeral services. Funeral, mortuary, cremation, burial, cemetery, and related services. 

Minimum Basic Operations. For  purposes of this  Proclamation, Minimum Basic Operations include the following, provided that employees comply with Social Distancing Requirements, to the extent possible, while carrying out such operations:

23. The minimum necessary activities to maintain the value of the business’s inventory, preserve the condition of the business’s physical plant and equipment, ensure security, process payroll and employee benefits, or for related functions.

24. The minimum necessary activities to facilitate employees of the business being able to continue to work remotely from their residences.

Essential Travel. For  purposes of this  Proclamation, Essential Travel includes travel for any of the following purposes. Individuals engaged in any Essential Travel must comply with all Social Distancing Requirements as defined in this Section.

25. Any travel related to the provision of or access to Essential Activities, Essential Governmental Functions, Essential Businesses and Operations, or Minimum Basic Operations.

26. Travel to care for elderly, minors, dependents, persons with disabilities, or other vulnerable persons.

27. Travel to or from educational institutions for purposes of receiving materials for distance learning, for receiving meals, and any other related services.

28. Travel to return to a place of residence from outside the jurisdiction.

29. Travel required by law enforcement or court order, including to transport children pursuant to a custody agreement.

30. Travel required for non-residents to return to their place of residence outside the County. Individuals are strongly encouraged to verify that their transportation out of
the County remains available and functional prior to commencing such travel.

Social Distancing Requirements. For purposes of this  Proclamation, Social Distancing Requirements includes maintaining at least six-foot social distancing from other individuals, washing hands with soap and water for at least twenty seconds as frequently as possible or using hand sanitizer, covering coughs or sneezes (into the sleeve or elbow, not hands), regularly cleaning high-touch surfaces, and not shaking hands.

Required measures. Essential Businesses and Operations and businesses engaged in Minimum Basic Operations must take proactive measures to ensure compliance with Social Distancing Requirements, including where possible:

1. Designate six-foot distances. Designating with signage, tape, or by other means sixfoot spacing for employees and customers in line to maintain appropriate distance;

2. Hand sanitizer and sanitizing products. Having hand sanitizer and sanitizing products readily available for employees and customers;

3. Separate operating hours for vulnerable populations. Implementing separate operating hours for elderly and vulnerable customers; and

4. Online and remote access. Posting online whether a facility is open and how best to reach the facility and continue services by phone or remotely.

This Proclamation  is issued in accordance with, and incorporates by reference, the March 13, 2020 Joint Proclamation of a State of Emergency and Proclamation of the  State of Emergency issued by the Governor on March 10, 2020. 

This Revised Proclamation will be valid through April 16, 2020 but will be regularly reviewed and evaluated and may be revised, amended, extended accordingly, based upon existing evidence  and recommendations by the Public Health Director and City of Charlotte Office of Emergency Management. .   

Any person violating any prohibition or restriction imposed by this  proclamation as authorized by   the Joint Proclamation of State of Emergency shall be guilty of a Class 2 misdemeanor in accordance with G.S. 14-288.20A.  

If any section, subsection, sentence, clause, or phrase of this  Proclamation is for any reason held to be invalid, such decision shall not affect the validity of the remaining portions of the  Proclamation. 

 The signatories  hereby declare that it would have passed this Proclamation and each section, subsection, clause, and phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases be declared invalid.
This  Proclamation is adopted and shall take effect on the ___ day of __________, 2020 at 0800 am.