TheCorporateCounsel.net

Goodwin recently published an updated version of their Form 10-Q Checklist for the 2nd Quarter of 2023. The first several pages address the new 10b5-1 plan-related disclosure mandates and some other potential disclosures that you should consider as you prepare your 2nd quarter 10-Q.  This excerpt discusses the disclosure implications of the disruptions in the banking sector:

Review MD&A (Part 1, Item 2) and Risk Factors (Part 2, Item 1A) for financial and business-related disclosure about direct or indirect effects of actual events or reasonably foreseeable future events related to disruptions in the banking industry or financial services sector such as events involving limited liquidity, defaults, non-performance or other adverse events or developments. These could include not only impacts on the company but also impacts on banks and other financial sector companies with which the company has direct or indirect relationships, the company’s customers, suppliers and other counterparties, or the financial services industry generally.

Examples of potential disclosure topics cited by the checklist include, among others delayed or lost access to amounts available under credit facilities, limitations on access to deposits and other cash management vehicles, potential covenant breaches and cross-defaults, and expenses associated in obtaining replacement LOCs and other credit support arrangements.

– John Jenkins