Bloomberg Law
June 23, 2020, 3:36 PMUpdated: June 23, 2020, 4:41 PM

Bankrupt Companies Dealt Judicial Blow in Bid for Virus Aid (1)

Alex Wolf
Alex Wolf
Reporter

The Small Business Administration’s rules preventing bankrupt companies from seeking Paycheck Protection Program loans can’t be judicially blocked, a federal appeals court said, narrowing a Texas ambulance operator’s chances for Covid-19 stimulus aid.

Precedent states that “all injunctive relief directed at the SBA is absolutely prohibited,” a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit said Monday. The decision, the first from a federal appeals court on the issue, reverses a Texas bankruptcy judge’s order last month that the agency consider a Chapter 11 debtor’s PPP loan application.

The SBA’s appeal was directly certified for review ...

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