Amended Stipulation for Compromise Settlement — Franklin Capital Holdings v. SBA (N.D. Ill.)

Record facts

U.S. District Court, Northern District of Illinois, Eastern Division · No. 1:22-cv-04602 · Doc. 29 · 2023-04-21 · Docket on CourtListener

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Case: 1:22-cv-04602 Document #: 29 Filed: 04/21/23 Page 1 of 5 PagelD #:912

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

FRANKLIN CAPITAL HOLDINGS LLC,
Plaintiff,
Vv.

)
)
)
)
THE UNITED STATES SMALL ) No. 22 C 4602
BUSINESS ADMINISTRATION, )
ISABELLA CASILLAS GUZMAN, )
Administrator of the U.S. Small Business )
Administration, JANET YELLEN, Secretary )
of Treasury of the United States, THE )
)
)
)

UNITED STATES OF AMERICA,

Magistrate Judge Cummings

Defendants.
AMENDED STIPULATION FOR COMPROMISE SETTLEMENT AND RELEASE

Plaintiff Franklin Capital Holdings LLC (“Franklin”) and Defendants the United States
Small Business Administration (“SBA”), Isabella Casillas Guzman, in her official capacity as
Administrator of the SBA, Janet Yellen, in her official capacity as Secretary of the Treasury of the
United States, and the United States of America (“Defendants”), through their undersigned
attorneys, hereby agree and stipulate as follows:

l. The parties do hereby agree to settle and compromise the above-entitled action
under the terms and conditions set forth herein (the “Settlement Agreement”).

2. Partial Forgiveness of PPP Loan to Plaintiff: On April 10, 2020, Franklin reccived
from CIBC Bank USA (“Lender”) a Paycheck Protection Program (“PPP”) loan in the amount of
$295,100 (“Loan”). On February 8, 2021, Franklin completed a PPP Loan Forgiveness
Application (SBA Form 3508), requesting forgiveness for the full amount of the Loan
(“Application”). On or about January 31, 2022, the SBA denied Franklin’s Application, which

ultimately resulted in the above-captioned matter. In accordance with the terms of this Settlement
Case: 1:22-cv-04602 Document #: 29 Filed: 04/21/23 Page 2 of 5 PagelD #:913

Agreement, the SBA shall reopen and re-process Franklin’s Application, and approve partial
forgiveness for 75% of the principal balance, or $221,325. Franklin will remain responsible for
the remaining 25% of the Loan balance, or $73,775. Following the approval of the Application
providing partial forgiveness of 75% of the Loan, Plaintiff will make payments on the remaining
balance of the Loan in accordance with the Lender’s agreed upon terms.

3. Fees, Costs, and Expenses: The partial forgiveness amount described in paragraph
2, above, represents the entire amount of the compromise settlement. The respective parties will
each bear their own costs, fees, and expenses, including attorney’s fees, incurred in relation to this
matter.

4. No Admission of Liability or Wrongdoing: This Settlement Agreement is not and
shall not be construed as an admission by the Defendants of the truth of any allegation or the
validity of any claim asserted in this lawsuit, or of the Defendants’ liability. Conversely, this
Settlement Agreement shall not be construed as a concession by Franklin with regard to any of its
claims asserted in this lawsuit or of the Defendants’ liability.

5. Release: Upon receipt of the SBA’s partial forgiveness action described in
paragraph 2 above, Plaintiff, including its successors and agents, fully and forever releases,
acquits, and discharges defendants and their components, agents, employees, and former
employees, either in their official or individual capacities, from any and all claims, demands, and
causes of action of every kind, nature, or description, whether known or unknown, that plaintiff
may have had, may now have, or may hereafter discover arising out of or in connection with any
event occurring prior to the date of this Settlement Agreement relating to all claims that were raised
or could have been raised in this action and all other claims relating to the litigation and plaintiff's

PPP toan.

NM
Case: 1:22-cv-04602 Document #: 29 Filed: 04/21/23 Page 3 of 5 PagelD #:914

6. No Assignment: Plaintiff represents and warrants that it is the sole and lawful owner
of all rights, title and interests in and to every claim and other matter that it purports to release
herein, and that it has not heretofore assigned or transferred, or purported or attempted to assign
or transfer to any person or entity any claims or other matters herein released. The Plaintiff shall
indemnify the Defendants, and any of its departments, components and current or former
employees, whether in their official or individual capacities, against, and defend and hold harmless
from, any claims arising out of or relating to any such assignment or transfer of any claims or other
matters rcleased herein.

7. Tax Consequences: Compliance with all applicable fedcral, state, and local tax
requirements shail be the sole responsibility of Plaintiff. This Settlement Agreement is executed
without reliance upon any representation by defendants as to tax consequences, and plaintiff is
responsible for the payment of any taxes that may be associated with the settlement payments.

8. Merger Clause: This Settlement Agreement contains the entire agreement between
the partics hereto, and plaintiff acknowledges and agrees that no promise or representation not
contained in this agreement has becn made to it and acknowledges and represents that this
Settlement Agrecment contains the entire understanding between the parties, and contains all terms
and conditions pertaining to the compromise and settlement of the disputes referenced herein. No
statement, remark, agreement, or understanding, oral or written, that is not contained herein shall
be recognized or enforced, nor does this Settlement Agreement reflect any agreed upon purpose
other than the desire of the parties to reach a full and final conclusion of the litigation and to resolve

that suit without the time and expense of further litigation
Case: 1:22-cv-04602 Document #: 29 Filed: 04/21/23 Page 4 of 5 PagelD #:915

9. Modification: This Settlement Agreement cannot be modified or amended except
by an instrument in writing, agreed to and signed by the parties, nor shall any provision hereof be
waived other than by a written waiver, signed by the parties.

10. Binding Successors: This Settlement Agreement shall be binding upon an inure to
the benefit of the Plaintiff and the Defendant and their respective successors, assigns, and personal
representatives, including any person, entity, department, or agency succeeding to the interests or
obligations of any party hereto, or having an interest herein.

11, Severability: The provisions of this agreement shall be deemed severable, and any
invalidity or unenforceability of any one or more of its provisions shall not affect the validity or
enforceability of the other provisions herein.

12. Public Disclosure: The parties agree that this Settlement Agreement, including all
the terms and conditions of this compromise settlement and any additional agreements relating
thereto, may be made public in their entirety, and the Plaintiff expressly consents to such release
and disclosure pursuant to 5 U.S.C. § 552a(b).

13. Dismissal of claims: Plaintiff stipulates to dismissal of all of its claims in the
litigation, with prejudice, pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii).
Notwithstanding such dismissal, the Parties agree that Franklin may petition the Court to enforce
the terms of this Settlement Agreement.

14. No Precedential Value: This agreement shali have no precedential value
whatsoever in any future or pending complaints, grievances, appeals, or lawsuits against the
defendants, their agencies, and their agents, officers, or employees. This Settlement Agreement

may not be cited by any person as a model for any future settlement in any forum, provided,
Case: 1:22-cv-04602 Document #: 29 Filed: 04/21/23 Page 5 of 5 PagelD #:916

however, that the parties may cite this agreement in support of any claim that the other party has

breached its terms.

15. —_ It is contemplated that this Stipulation for Compromise Settlement may be executed

in several counterparts, with a separate signature page for each party. All such counterparts and

signature pages, together, shall be deemed to be one document.

Attorney for Defendants:

Attorney for Plaintiff:

Plaintiff:

MORRIS PASQUAL
Acting United States Attorney

By: Va awe

NICOLE FLORES

Assistant United States Attorney
219 South Dearborn Street
Chicago, Illinois 60604

(312) 886-9082

nicole.flores3 @usdoj.gov

Executed this 2O*day of April, 2023

Bafa

BRET S. WACKER
CLARK HILL PLC

730 17th Street, Suite 420
Denver, CO 80202
Telephone: 202-772-0906
bwacker@clarkhill.com

Executed this721st_ day of April, 2023

GARY ED/IN ~~
Chairman and Chief Executive Officer
Franklin Capital Holdings LLC

a
Executed this 4! day of Apri!, 2023

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