Bankrupt USA Rugby Gets Court Approval to Keep Virus Loan Money

A bankrupt rugby league got court approval to use money it borrowed under a U.S. small business loan program despite the Small Business Administration’s policy against lending to bankrupt borrowers.

Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware Wednesday approved United States of America Rugby Football Union Ltd.'s $375,000 loan under the Paycheck Protection Program created by the CARES Act. The program was designed to aid the economy in the wake of the coronavirus pandemic.

Several small businesses in Chapter 11 have challenged the SBA’s policy to exclude bankrupt borrowers, with mixed results.

The ...