Bankrupt Businesses Can’t Be Blocked From Virus Aid Loans (1)

April 27, 2020, 7:26 PM; Updated: April 27, 2020, 9:29 PM

The Small Business Administration can’t automatically deny a loan under the Paycheck Protection Program solely because the applicant is in Chapter 11 bankruptcy, a Texas bankruptcy judge ruled.

The April 25 temporary restraining order from Judge David R. Jones of the U.S. Bankruptcy Court for the Southern District of Texas requires the SBA to consider Hidalgo County Emergency Service Foundation’s application for a PPP loan.

The case appears to be the first in which a court has barred the SBA from systematically denying PPP loans just because the borrower is or was in bankruptcy, said N. Chris Glenos, leader of ...

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