Bankrupt radiology practice not entitled to $527K PPP loan, appeals court rules
A federal appeals court on Wednesday sided with a recent U.S. Small Business Administration decision to prevent a bankrupt Florida radiology practice from receiving a $527,000 Paycheck Protection Program loan.
The decision comes by way of a three-judge panel of the 11th U.S. Circuit Court of Appeals and overturns U.S. Bankruptcy Judge Michael Williamson’s ruling made in June, the Orlando Sentinel reported on Dec. 23.
The SBA and USF Federal Credit Union both believed that Judge Williamson overstepped his authority when he ruled that withholding Gateway Radiology Consultants’ funds was discriminatory. Despite his decision, Williamson on July 1 asked the Atlanta appeals court to handle the issue, noting the SBA’s stance has led to similar litigation around the country.
In the 44-page opinion released on Tuesday, Chief Judge Ed Carnes along with Judges Robin Rosenbaum and R. Lanier Ander III said that Congress delegated to the SBA the question of whether businesses in bankruptcy proceedings are eligible for loans.
“The SBA did not exceed its authority in adopting the non-bankruptcy rule for PPP eligibility,” the opinion read. “That rule does not violate the CARES Act, is based on a reasonable interpretation of the Act, and the SBA did not act arbitrarily and capriciously in adopting the rule.”
Gateway first filed for bankruptcy back in May 2019, with some $22 million in assets and nearly $15 million in debts. Around since 1975, the Florida provider’s 50 employees had been working for half their regular pay during the pandemic.
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Matt joined Chicago’s TriMed team in 2018 covering all areas of health imaging after two years reporting on the hospital field. He holds a bachelor’s in English from UIC, and enjoys a good cup of coffee and an interesting documentary.