BakerHostetler Orlando Partners Elizabeth Green and Tiffany Payne Geyer Obtain Injunction Allowing Chapter 11 Debtor to Apply for Paycheck Protection Program Funds

News / May 11, 2020

Partners Elizabeth Green and Tiffany Payne Geyer recently obtained an injunction barring the Small Business Administration (SBA) from considering bankruptcy as a bar to qualifying for Paycheck Protection Program (PPP) funds under the CARES Act. Although the CARES Act does not bar chapter 11 debtors from qualifying for PPP funds, the SBA questionnaire and subsequent regulation barred debtors from applying for PPP funds. BakerHostetler represents Chapter 11 trustee of St. Alexius Hospital in St. Louis, Missouri, and challenged the SBA on the basis that it discriminated unfairly against chapter 11 debtors. The bankruptcy court entered an injunction against the SBA and precluded the lender and the SBA from considering the bankruptcy as a factor, which permitted the hospital to apply for much-needed PPP funding.