The Small Business Administration has become ensnared in a series of lawsuits regarding its rollout of the Paycheck Protection Program — which experts say could have significant consequences for the program and future coronavirus relief efforts.
Since the CARES Act was signed into law March 27, the SBA has become the subject of at least 26 separate nonbankruptcy lawsuits, according to a review of filings available on court document search engine PACER. The lawsuits range from who could apply to the PPP, who could lend under the program and whether the SBA strayed too far from the will of Congress when writing its much-analyzed PPP regulations.
"These cases are important to watch for future programs as Covid-19 continues to wreak economic havoc, especially in regions where cases are rising once again, and Congress readies potential additional relief," said Bonnie Hochman Rothell.
“They are important precedent-setting cases. I don't know if they are going to have a huge impact because money has been allocated, and you can't go back and change it. But I think it's going to be used as a basis for some of the questions that are coming up right now,” Rothell said. “There are going to be other funding rounds down the road.”
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