By:  Shelby M. Thornton, DJCL staff member at Widener University Delaware Law School.

As the new year begins, the latest global outbreak, the Coronavirus (COVID-19), has taken the world by storm. This new pandemic is spreading across the world disrupting travel and many other globalized systems. The impact of global outbreaks on business and economics is sometimes overlooked, but it is nevertheless profound.[i] With the potential to present a risk similarly-scaled on the global Gross Domestic Product (“GDP”) to climate change, businesses cannot avoid the truth that global diseases are an ever-present serious concern.[ii]

Unease regarding the spread of infectious disease and the impact it poses on business is nothing new.[iii] The world has seen various epidemics, global pandemics, and even localized outbreaks – all of which have an economic impact.[iv] It is estimated that the yearly pandemic influenza has global costs totaling nearly $500 billion, accounting for lost income and higher mortality rates.[v] Furthermore, the Ebola outbreak in West Africa affected the local GDP growth by decreasing it 8 percentage points from 2013 to 2014.[vi] As to be expected, travel and tourism are two globalized markets that see a steep decrease among times of disease.[vii] Moreover, foreign direct trade investments are impacted in regions with long-term infectious disease outbreaks, such as those areas plagued by Malaria and Human Immunodeficiency Viruses, better known as HIV.[viii] Just as economic policymakers create risk management plans for natural disasters and climate change, they are continuously making plans to “manag[e] various forms of risk, such as trade imbalances, exchange rate movements, and changes in the market interest rates” resulting from global health changes.[ix]

The Coronavirus, although relatively new and still too early in its progression to measure the magnitude of its impact, has already caused a multitude of issues. The United States Securities and Exchange Commission (the “SEC”) released a statement warning against fraudulent investment schemes that claim to help and lend aid to stopping the Coronavirus.[x] The warning from the SEC especially cautions against purchasing low-priced microcap stocks.[xi] Often, stock prices increase by spreading false rumors that result in investors losing a majority of their money when the stocks inevitably crash and promotors dump their own shares.[xii] Exploiting the crisis in order to make money, and causing investors to lose their own money, is a hidden risk with any epidemic.[xiii]

Many large companies are experiencing the impact of the Coronavirus in their global businesses.[xiv] Investors for companies including Mastercard, General Electric, 3M Co., and Apple, among others, have commented to Forbes that they are attempting to account for the delay in manufacturing and being forced to assess the outlook for their businesses that are located in high-risk areas, including China.[xv] This includes providing those affected employees with extra time off, attempting to send healthcare related items to the employees, and mitigating economic losses due to various shutdowns and delays.[xvi]

The Coronavirus is being blamed as the final attributable factor causing Valeritas Holdings, Inc. (“Valeritas”), a diabetes drug-technology company, to file for Chapter 11 in the United States Bankruptcy Court for the District of Delaware.[xvii] Valeritas has its manufacturing plant in China.  At the beginning of the Lunar New Year, Valeritas was experiencing low inventory.  Since the Coronavirus outbreak, the company has experienced even more distress.[xviii] But the distress continues as companies, like Valeritas, were closed for an additional week as a result of the Chinese government extending the holiday to combat the Coronavirus.[xix] Valeritas’ CEO stated that this extension made the manufacturing employees’ return to work even more uncertain.[xx]

However, it is not just large companies that are feeling the effects. Small businesses are taking a major hit as the Coronavirus spreads through the United States.[xxi] In an address to the Nation on March 11, 2020, President Trump addressed the impacts on small businesses and is implementing a $50 billion plan to assist small business owners.[xxii] The President has also pledged to take measures to help those workers who are unable to work and are losing pay.[xxiii]

Evidently, the impact of global outbreaks, and currently the Coronavirus, can cause serious concerns for businesses. The best way to combat these concerns is for businesses to be prepared and have a plan to deal with global health risks.[xxiv] For example, the World Economic Forum has suggested a few ways businesses can prepare for the Coronavirus.[xxv] Testing technology and preparing a plan for employees to work from home, creating a policy for sick pay, and developing methods for communication with employees are a few of the suggestions to deal with the uncertainty of the Coronavirus.[xxvi] Employers have an important role to play in such ambiguous and changing times.[xxvii]

About the Author: Shelby is a second-year Regular Division student, expected to graduate in 2021.  Shelby spent the summer of 2019 as a Judicial Intern with The Honorable Christopher J. Burke in the United States District Court for the District of Delaware. Shelby is an active staff member of the Delaware Journal of Corporate Law, Transactional Law Honor Society, and Phi Alpha Delta. Shelby will be spending the summer of 2020 participating in Potter Anderson & Corroon’s Summer Associate Program. Shelby will serve as the DJCL Editor-in-Chief for the 2020-21 academic school year.


[i]David E. Bloom, Danielle Cadarette & JP Sevilla, Epidemics and Economics, Fin. & Dev., Vol. 55, No.2 (June 2018),

[ii] Outbreak Readiness and Business Impact: Protecting Lives and Livelihoods across the Global Economy, World Econ. F. (Jan.18, 2019),

[iii] Bloom, supra note 1.

[iv] Id.

[v] Id.

[vi] Id.

[vii] See id.

[viii] Id.

[ix] Id.

[x]Look out for Coronavirus-Related Investment Scams- Investor Alert, U.S. Securities and Exchange Commission (Feb. 4, 2020),

[xi] Id.

[xii] Id.

[xiii] Id.

[xiv] Alap Shah, Coronavirus: How Companies Around the Globe Are Responding, Forbes (Feb. 3, 2020),

[xv] Id.

[xvi] Id.

[xvii] Rick Archer, Coronavirus Woes Tip Drug Co. Into Del. Ch. 11, Law360 (Feb. 10, 2020),

[xviii] Id.

[xix] Id.

[xx] Id.

[xxi] See Thomas Barrabi, Trump Offers Coronavirus Relief for Small Businesses with $50B in aid, Fox Business (Mar. 11, 2020),

[xxii] Id.

[xxiii] Id.

[xxiv] See generally Donald W. Benson & Alexander D. Paterra, Pandemics – Preparing Businesses for a Global Outbreak, 21 S.C. Law. 30 (2009) (discussing various work-place policies and federal regulations to implement during the spread of a pandemic).

[xxv] See Mark Henderson, 3 Ways Businesses Must Prepare for Coronavirus, World Econ. F. (Mar. 4, 2020),

[xxvi] Id.

[xxvii] See id.