Manier & Herod Secures Injunctive Relief Against United States Small Business Administration To Prevent Discriminatory Implementation Of The Paycheck Protection Program

Posted on June 10, 2020 at 12:59 pm

Manier & Herod attorney Robert Miller obtained temporary and permanent injunctive relief against the United States Small Business Administration (the “SBA”) in the United States Bankruptcy Court for the Western District of Tennessee based on the SBA’s discriminatory implementation of the Paycheck Protection Program (“PPP”), a federal loan guarantee program designed to provide subsidies to businesses adversely affected by the COVID-19 pandemic. In this case, Mr. Miller challenged the SBA’s arbitrary rule that bankrupt entities and entities that are owned by a bankrupt entity are ineligible for PPP funds based solely on their affiliation with the bankruptcy process. After extensive briefing and a hearing on the merits, the bankruptcy court found that the SBA’s bankruptcy exclusion: (i) violated the Bankruptcy Code’s anti-discrimination provision, (ii) was arbitrary and capricious, and (iii) exceeded the SBA’s statutory authority under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the PPP. Therefore, the Court required the SBA to process the business’s PPP loan application.