The Small Business Administration convinced the Second Circuit that it didn’t discriminate against Springfield Hospital in Vermont when it blocked the bankrupt hospital operator from applying for funds in a federal Covid-19 help program, Bloomberg reports.
Section 525(a) of the bankruptcy code bans government units from discriminating against bankrupt entities applying for a “license, permit, charter, franchise, or other similar grant.”
But the Paycheck Protection Program, aimed at helping small businesses during the pandemic, was a loan guarantee program and not a grant, the U.S. Court of Appeals for the Second Circuit said Wednesday.
The SBA didn’t run afoul of the bankruptcy code, the court ruled. Read more.
