In a recent Fox Alert, Harriet Wallace examined the new potential for debtors and bankruptcy trustees to apply for Paycheck Protection Program (PPP) loans in connection with operating a debtor’s business in bankruptcy under the Consolidated Appropriations Act 2021 that was signed by President Trump on December 27, 2020.
While the availability of PPP loans in bankruptcy could provide a helpful tool to assist debtors in restructuring, particularly during the COVID-19 pandemic, eligibility for debtors to obtain PPP loans is subject to the discretion of the Small Business Administration (SBA), which thus far has not rescinded its previously implemented rule that bankruptcy debtors are specifically ineligible for PPP loans.
Fox and the In Solvency Blog will continue to monitor developments regarding PPP availability in bankruptcy and other impacts of pandemic-related relief on bankruptcy.