Concessions HH, JV v. The United States Small Business Administration — N.D. Ga., Atlanta Division, No. 1:24-cv-01870-WMR

Case summary

Concessions HH, JV petitioned the U.S. District Court for the Northern District of Georgia, Atlanta Division, No. 1:24-cv-01870-WMR, for review of a Small Business Administration final loan review decision of November 21, 2022 that found the borrower ineligible for a Paycheck Protection Program loan and set the final forgiveness amount at $0.00 on an approved loan of $2,000,000.00. The petitioner moved for summary judgment, asking the court to set aside the decision, direct the SBA to forgive the second-draw loan and vacate the Corporate Group Rule as contrary to the CARES Act. On September 8, 2025 District Judge William M. Ray, II denied the motion but held the SBA's application of that rule arbitrary and capricious, vacated the loan review decision and remanded for further review.

Case at a glance

What did the SBA decide?

A final SBA loan review decision of November 21, 2022, addressed to the lender through the forgiveness platform, records the borrower as Concessions HH, JV, an approved loan amount of $2,000,000.00 approved on May 29, 2021, a lender forgiveness decision of $2,000,000.00 submitted July 19, 2022, and a final SBA forgiveness amount of $0.00. The SBA determined that the borrower was ineligible for the PPP loan because, as part of a corporate group, it had received more than $4,000,000 of second-draw PPP loans in the aggregate, the group being a family of 98 entities defined by ownership, management and identity of interest, with common ownership or management disclosed on the borrower's addendums to Form 3511 and affiliation assessed under 13 C.F.R. § 121.103.

What did the court decide?

In an order of September 8, 2025, after a hearing, the court denied the petitioner's motion for summary judgment. Sitting as an appellate tribunal reviewing an administrative decision under 5 U.S.C. § 706(2)(A), it held that the SBA's application of the Corporate Group Rule to the petitioner's loan calculation and its denial of partial forgiveness was arbitrary and capricious, in pertinent part because the agency failed to provide any satisfactory reasoning beyond asserting that it has broad power to do so. It vacated the loan review decision and remanded for additional review rather than ordering forgiveness, noting that an agency ordinarily should be given the opportunity to review the application of its own regulations.

What is the Corporate Group Rule the case turns on?

The order describes it as a regulation the SBA promulgated after the CARES Act, the Unlawful Corporate Group Maximum Rule, 85 Fed. Reg. 26325, providing that a business part of a single corporate group could not obtain more than $20 million in PPP loans, with "corporate group" defined as businesses majority owned, directly or indirectly, by a common parent, and applying even to businesses eligible for the CARES Act waiver-of-affiliation provision. The order records that the rule was reinstated by the Economic Aid Act, 86 Fed. Reg. 3702, with the same definition.

Summary written from the documents on this page; every sentence is sourced.