Columbus Hotels, a Georgia-based LLC that owns and operates the La Quinta Inn on Highway 45, is suing representatives from the United States Small Business Administration, the Secretary of Treasury and the Department of Justice over Paycheck Protection Program Loan forgiveness.
The complaint, which only represents one side of a legal argument, was filed in the United States District Court for the Northern District of Mississippi on July 10.
Attorney Michael Hurst, who is representing Columbus Hotels LLC in the case, told The Dispatch Friday that his client owns 30 hotels across five states and is filing claims in nine federal district courts concerning this issue.
“Our client just wants a court to give it justice,” Hurst said. “We’re not asking for special favors. We’re not asking necessarily for money damages. We just want to be treated like everyone else who received PPP loans and be treated fairly. I think that’s what it comes down to.”
In the case of the Columbus complaint, the LLC has waited three years for notification that its Second Draw Paycheck Protection Program Loan has been forgiven.
According to the complaint, Columbus Hotels applied for its First Draw PPP Loan on or before April 3, 2020, through Citizens National Bank of Meridian as its lender. That loan, worth $68,119, was disbursed to Columbus Hotels on April 15 of that year, and by Dec. 8, Columbus Hotels received a notification that its first loan had been forgiven.
The SBA issued a rule placing a $20 million limitation on the amount of PPP loans businesses in a single corporate group can receive on April 30, 2020.
In January 2021, Columbus Hotels applied for and received its Second Draw PPP Loan from the same lender, this time worth $95,366. In July, the LLC applied for forgiveness for the Second Draw PPP Loan. But on June 30, Columbus Hotels received a notification that the SBA would not forgive its Second Draw PPP Loan, as it had exceeded the corporate limit for forgiveness.
The company appealed this decision, and SBA “charged off” the loan to the Columbus Hotels’ lender. However, the company itself did not receive notice it had been forgiven for the loan, leaving it liable to repay the $95,366.
“That’s the frustration,” Hurst said. “We’ve gone through the process, we’ve appealed it with the SBA, and they have not made a decision. So our client is just hanging out there with this cloud hanging over their head, basically.”
By January 2022, Columbus Hotels received a Civil Investigative Demand from the Department of Justice requesting responses to interrogatories and production of documents related to its PPP loans and forgiveness. The LLC never received a final determination about the second loan’s forgiveness, presumably because of the investigation, according to the complaint.
In the complaint, Columbus Hotels requests the court declare its eligibility to apply for and receive the loan, that it behaved appropriately with its commingling of PPP loan funds in its existing accounts and that it did not falsely certify its loan forgiveness application.
The plaintiff also asks the court to enter an order compelling the Small Business Administration to immediately forgive the Second Draw PPP Loan or implement a full administrative review if the defendants intend to deny that forgiveness.
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