Ban on Virus Aid for Bankrupt Companies May Yield Circuit Split

A federal bankruptcy judge and a federal district court judge separately ordered the Small Business Administration to consider bankrupt companies’ applications for Paycheck Protection Act loans the same day a federal appeals court ruled that such orders aren’t allowed.

Judge Colleen A. Brown of the U.S. Bankruptcy Court for the District of Vermont Monday issued a permanent injunction, saying the SBA can’t categorically disqualify Springfield Hospital from PPP loans under the CARES Act just because the borrower is in bankruptcy.

Also on Monday, U.S. District Judge Richard L. Young of the Southern District of Indiana issued a permanent injunction in ...