Tag: House Oversight Subcommittee

House Subcommittee insists certain public companies return PPP loans

As discussed in this PubCo post, in April, the Treasury Department issued a series of FAQs related to loans made under the Paycheck Protection Program provisions of the CARES Act, one of which was addressed to borrowers that are large companies and, particularly, public companies.  The FAQ provides that, to be eligible for a PPP loan, a borrower must certify, in good faith, that the loan is necessary to support continuing operations.  According to the FAQ, that may be difficult in some cases, contending that “it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith….” The FAQ provided a safe harbor, under which the SBA would deem the borrower to have made the required certification in good faith if the funds were repaid in full by May 14 (as extended in question 43). As reported here, Treasury Secretary Steven Mnuchin has warned that companies receiving loans over $2 million would be audited and could have potential criminal liability if their certifications were untrue.   Now, a House oversight subcommittee has demanded that certain public companies return the funds.