Issues: Chapter 11 debtor requested a temporary restraining order against the SBA for excluding debtor from Paycheck Protection Program (“PPP”) loan under the CARES Act. Issues addressed by the Court included the required standards for injunctive relief, whether the anti-discrimination provision of section 525 of the Bankruptcy Code was being violated by the SBA, whether the SBA was improperly excluding bankruptcy debtors from PPP loans under the CARES Act, and whether the Court had jurisdiction to enjoin the SBA.
Holding: The Court denied the request for a temporary restraining order. The Court’s ruling is set forth in a written transcript. The Court determined that the debtor was not entitled to injunctive relief because the debtor did not have a substantial likelihood of success on the merits. Specifically, the Court found: (a) the anti-discrimination provision of section 525(a) of the Bankruptcy Code did not apply to loans made or guaranteed by the SBA under the PPP; (b) the actions of the SBA in excluding bankruptcy debtors from the PPP loan program under the CARES Act was not arbitrary and capricious under the deferential standard of review afforded to an administrative agency like the SBA; and (c) by statute, the Court did not have jurisdiction to enjoin the SBA even if there was a violation of the CARES Act.