PilieroMazza—a business law firm serving the legal needs of government contractors and commercial businesses—is pleased to announce that attorneys from the Firm’s Government Contracts and Litigation & Dispute Resolution practice groups overturned another PPP (Paycheck Protection Program) loan forgiveness denial for a client that was wrongfully denied forgiveness by the Small Business Administration (SBA). “It’s important for businesses that receive a denial of their PPP loan forgiveness to know their rights and to carefully assess the basis for the denial,” said Cy Alba, Practice Group Chair of the Government Contracts Group. “We’re of course pleased with the results our team was able to obtain for the client as in many cases the unexpected loan repayment can be crippling for small businesses.”
In the rush to apply for a PPP loan in the initial days of the program, the client applied for loans with two different banks in the hopes that one would go through. When the client received the first set of loan proceeds, they informed the second bank that they had already received a loan, but the bank continued to process the application. Indeed, the second bank issued the loan proceeds told them to keep the loan and spend it appropriately (which is not correct). When the client applied for forgiveness on both loans, SBA denied both forgiveness applications claiming that the client acted inappropriately in securing two loans and, apparently, that the “unclean hands” tainted both loans such that forgiveness was not appropriate for either even though the first loan application was in no way inappropriate.
In addition to the denials, the client was investigated by the Department of Justice (DOJ) for PPP fraud due to the company’s “inappropriate” second loan. In response to this investigation, and looking at possible serious consequences, the client (with other counsel) settled a False Claim Act investigation and agreed to pay back the second loan and damages. However, the client still sought for forgiveness for the first loan. That’s when they contacted PilieroMazza to appeal the matter before the Office of Hearings and Appeals (OHA). Because the first loan was not procured through fraud and because the DOJ settlement did not foreclose the ability to seek forgiveness for the first loan, OHA agreed that SBA’s denial was inappropriate and our client was entitled to full forgiveness of the first loan.
About PilieroMazza
PilieroMazza serves as a strategic business partner to government contractors and commercial businesses from numerous industries that operate nationally and internationally. With attorneys from a cross-section of the Firm’s core practice areas—including Government Contracts, Business & Transactions, Labor & Employment, and Litigation & Dispute Resolution—working seamlessly as a team to support the legal and business needs of their clients, PilieroMazza attorneys offer thoughtful and thorough solutions to protecting their clients’ business interests. Our specialized knowledge of the law, productive relationships with decision-makers at various government agencies, and value-driven business model, make PilieroMazza uniquely qualified to provide clients with highly valuable and exceptionally skilled representation. To learn more about PilieroMazza, visit us at www.pilieromazza.com.
