As discussed in earlier posts, substantial uncertainty exists over whether companies in bankruptcy are eligible to pursue funding pursuant to the SBA’s Paycheck Protection Program, or PPP, which was established by the CARES Act to support small businesses by offering SBA-guaranteed loans on advantageous terms. Litigation has ensued, with jilted companies looking to restructure in

The CARES Act does not expressly provide that companies in bankruptcy are ineligible to receive PPP loans; the CARES Act is, instead, silent on the issue. Nonetheless, the SBA has taken measures to block companies in bankruptcy from receiving PPP loans—first, by requiring participating lenders to use an SBA-sponsored loan application that, on

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020 to provide $2.2 trillion to U.S. citizens and businesses afflicted by the COVID-19 outbreak, including $349 billion for financing “small businesses” under the Paycheck Protection Program or PPP.  Under the PPP, eligible small businesses are entitled