Complaint for Declaratory Judgment and Mandamus Relief — Dothan Hospitality, LLC v. United States Small Business Administration (Dkt. 1, M.D. Ala.)

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Case 1:24-cv-00408-RAH-SMD         Document 1       Filed 07/12/24     Page 1 of 60




                       IN THE UNITED STATES DISTRICT COURT
                       FOR THE MIDDLE DISTRICT OF ALABAMA

 DOTHAN HOSPITALITY, LLC; ENTERPRISE                                               PLAINTIFFS
 HOTELS, LLC; ENTERPRISE HOSPITALITY LLC;
 HOPE HULL HOSPITALITY, LLC; MONTGOMERY
 DOWNTOWN HOTELS, LLC; MONTGOMERTY DT
 HOSPITALITY, LLC; P&T HOSPITALITY, LLC;
 AND VISION HOSPITALITY, LLC
 v.                                                       CIVIL ACTION NO.: 1:24-CV-408
 UNITED STATES SMALL BUSINESS
 ADMINISTRATION; ISABELLA CASILLAS
 GUZMAN, IN HER OFFICIAL CAPACITY AS
 ADMINISTRATOR OF THE SMALL BUSINESS
 ADMINISTRATION; JANET YELLEN, IN HER
 OFFICIAL CAPACITY AS UNITED STATES
 SECRETARY OF TREASURY; THE UNITED
 STATES DEPARTMENT OF JUSTICE; AND
 ATTORNEY GENERAL MERRICK GARLAND                                                 DEFENDANTS

                      COMPLAINT FOR DECLARATORY JUDGMENT
                             AND MANDAMUS RELIEF

        COME NOW, Plaintiffs Dothan Hospitality, LLC (“Dothan Hospitality”), Enterprise

Hotels, LLC (“Enterprise Hotels”), Enterprise Hospitality, LLC (“Enterprise Hospitality”), Hope

Hull Hospitality, LLC (“Hope Hull”), Montgomery Downtown Hotels, LLC (“Montgomery

Downtown”), Montgomery DT Hospitality, LLC (“Montgomery DT”), P&T Hospitality, LLC

(“P&T Hospitality”), and Vision Hospitality, LLC (“Vision Hospitality”) (collectively,

“Plaintiffs”), by and through their attorneys, and as for its Complaint against Defendants and

alleges as follows:

                              PRELIMINARY STATEMENT

        1.     This is an action for a declaratory judgment pursuant to Federal Rule of Civil

Procedure 57 and the Federal Declaratory Judgment Act, 28 U.S.C. § 2201, for the purpose of

determining a question of actual and immediate controversy between the parties.

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       2.      Plaintiffs seek a declaratory judgment that (1) Plaintiffs were eligible to apply for

a Paycheck Protection Program (“PPP”) loan; (2) Plaintiffs were eligible to receive a PPP loan;

(3) Plaintiffs’ commingling of PPP loan proceeds with current monies in existing bank accounts

was not prohibited by and did not violate the U.S. Code or SBA regulations; (4) Plaintiffs used the

PPP loan proceeds appropriately for eligible expenses; (5) Plaintiffs’ use of its own funds, which

were commingled with but in excess of PPP loan proceeds, for non-PPP purposes did not violate

the U.S. Code or SBA regulations, and (6) Plaintiffs did not falsely certify its PPP loan forgiveness

application.

       3.      Further, Dothan Hospitality, Enterprise Hotels, Hope Hull, and Montgomery

Downtown seek mandamus relief pursuant to 28 U.S.C. §§ 1331, 1361 and 1651(a) compelling

Defendants to forgive their Second Draw PPP Loan.

       4.      Defendant U.S. Department of Justice has issued Civil Investigative Demands

(“CIDs”) to Plaintiffs in an effort to determine the legitimacy of PPP loans and associated loan

forgiveness extended to Plaintiffs by Defendant United States Small Business Administration

(“SBA”), presumably in an effort to bolster allegations of violations of the False Claims Act and

FIRREA. As such, an actual case and controversy exists.

                                            PARTIES

       5.      Dothan Hospitality is a dissolved limited liability company organized under the

laws of Alabama with its principal office located at 1305 Mall of Georgia Blvd., Suite 201, Buford,

Georgia 30519. Dothan Hospitality owns and operates a Best Western Inn & Suites, 1650 Westgate

Parkway, Dothan, Alabama 36303, located in the Middle District of Alabama.

       6.      Enterprise Hotels is a limited liability company organized under the laws of

Alabama with its principal office located at 1305 Mall of Georgia Blvd., Suite 201, Buford,

Georgia 30519. Enterprise Hotels owns and operates a Fairfield Inn & Suites, 100 Brabham Drive,



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Enterprise, Alabama 36330, located in the Middle District of Alabama.

       7.      Enterprise Hospitality is a limited liability company organized under the laws of

Alabama with its principal office located at 1305 Mall of Georgia Blvd., Suite 201, Buford,

Georgia 30519. Enterprise Hospitality owns and operates a Hampton Inn & Suites, 8 West Pointe

Court, Enterprise, Alabama 36330, located in the Middle District of Alabama.

       8.      Hope Hull Hospitality is a limited liability company organized under the laws of

Alabama with its principal office located at 1305 Mall of Georgia Blvd., Suite 201, Buford,

Georgia 30519. Hope Hull Hospitality owns and operates a Fairfield Inn & Suites, 7560 Mobile

Highway, Montgomery, Alabama 36105, located in the Middle District of Alabama.

       9.      Montgomery Downtown Hotels is a limited liability company organized under the

laws of Alabama with its principal office located at 1305 Mall of Georgia Blvd., Suite 201, Buford,

Georgia 30519. Montgomery Downtown Hotels owns and operates a DoubleTree hotel, 120

Madison Avenue, Montgomery, Alabama 36104, located in the Middle District of Alabama.

       10.     Montgomery DT Hospitality is a limited liability company organized under the

laws of Alabama with its principal office located at 1305 Mall of Georgia Blvd., Suite 201, Buford,

Georgia 30519. Montgomery DT Hospitality owns and operates a SpringHill Suites, 152 Coosa

Street, Montgomery, Alabama 36104, located in the Middle District of Alabama.

       11.     P&T Hospitality is a limited liability company organized under the laws of

Alabama with its principal office located at 1305 Mall of Georgia Blvd., Suite 201, Buford,

Georgia 30519. P&T Hospitality owns and operates a Hampton Inn & Suites, 100 Commerce

Street, Montgomery, Alabama 36104, located in the Middle District of Alabama.

       12.     Vision Hospitality is a limited liability company organized under the laws of

Alabama with its principal office located at 1305 Mall of Georgia Blvd., Suite 201, Buford,

Georgia 30519. Vision Hospitality owns and operates a Hampton Inn & Suites, 60 Wasden Road,



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Hope Hull, Alabama 36043, located in the Middle District of Alabama.

       13.     Defendant United States Small Business Administration (“SBA”) is an independent

federal agency created and authorized pursuant to 15 U.S.C. § 633 et seq. Under the Coronavirus

Aid, Relief, And Economic Security (“CARES”) Act, the SBA administers the PPP.

       14.     Defendant Isabella Casillas Guzman is the Administrator of the SBA and is sued

only in her official capacity. Because she is the officer with final authority for administering the

PPP within the SBA, Administrator Guzman is a proper defendant for this cause of action.13

C.F.R. § 101.1 01(a)(1-2).

       15.     Defendant Janet Yellen is the Secretary of the United States Department of

Treasury and is sued only in her official capacity.

       16.     Defendant U.S. Department of Justice (“DOJ”) is an executive department of the

United States federal government.

       17.     Defendant Merrick Garland is the Attorney General of the United States, the

principal officer of DOJ, and is sued only in his official capacity.

                                   JURISDICTION & VENUE

       18.     This Court has jurisdiction over the subject matter of this civil action under 28

U.S.C. §§ 1331 and 2201 because the claims arise under the laws of the United States.

       19.     This Court also has jurisdiction pursuant to 15 U.S.C. § 634(b)(1) which vests

jurisdiction in any United States District Court to adjudicate cases against the Administrator of the

SBA.

       20.      The jurisdiction to grant declaratory relief is conferred upon the Court by Rule 57

of the Federal Rules of Civil Procedure as well as 28 U.S.C. § 2201.

       21.     The SBA’s denial of PPP relief to Plaintiff are final agency actions under 5 U.S.C.

§ 704, which this Court has authority to review under 5 U.S.C. § 702.



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        22.     Further, Dothan Hospitality, Enterprise Hotels, Hope Hull, and Montgomery

Downtown, seek mandamus relief pursuant to 28 U.S.C. §§ 1331, 1361 and 1651(a) compelling

Defendant SBA to forgive their Second Draw PPP Loans.

        23.     Venue is proper in this judicial district under 28 U.S.C. § 1391(e) because this is

an action against officers and agencies of the United States, a substantial part of the events giving

rise to the claims occurred in this judicial district, Plaintiffs are incorporated and operate in this

judicial district, and no real property is involved in the action.

        24.     Venue is also proper in this judicial district specifically because the U.S.

Department of Justice is conducting an investigation into Plaintiffs, and these investigations focus

primarily on conduct within this judicial district.

                                     LEGAL BACKGROUND

I.      The CARES Act and the Paycheck Protection Program

        25.     The Coronavirus Aid, Relief, and Economic Security ("CARES") Act is a federal

law enacted in March 2020 and designed to provide emergency financial assistance to the millions

of Americans suffering the economic effects caused by the COVID-19 pandemic.

        26.     One source of relief provided by the CARES Act was the authorization of

forgivable loans to businesses for job retention and certain other expenses, through a program

referred to as the Paycheck Protection Program ("PPP"). The program was modified and extended

thereafter.

        27.     To obtain a PPP loan, a qualifying business submitted a PPP loan application, which

was signed by an authorized representative of the business. The PPP loan application required the

business (through its authorized representative) to acknowledge the program rules and make

certain affirmative certifications to be eligible to obtain the PPP loan.




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       28.      In the PPP loan application (SBA Form 2483), the business (through its authorized

representative) was required to provide, among other things, its: (a) average monthly payroll

expenses; and (b) number of employees. These figures were used to calculate the amount of money

the small business was eligible to receive under the PPP. In addition, businesses applying for a

PPP loan were required to provide documentation confirming their payroll expenses.

       29.      A PPP loan application was processed by a participating lender. If a PPP loan

application was approved, the participating lender funded the PPP loan using its own monies. While

it was the participating lender that issued the PPP loan, the loan was 100% guaranteed by the SBA.

Data from the application, including information about the borrower, the total amount of the loan,

and the listed number of employees, was transmitted by the lender to the SBA in the course of

processing the loan and subsequent forgiveness process.

       30.      PPP loan proceeds were required to be used by the business on certain permissible

expenses—payroll costs, interest on mortgages, rent, and utilities. The PPP allowed the interest

and principal on the PPP loan to be entirely forgiven if the business spent the loan proceeds on

these expense items within a designated period of time and used a defined portion of the PPP loan

proceeds on payroll expenses.

   A. First Draw PPP Borrower Application Form

       31.      The PPP Borrower Application Form, effective April 2, 2020, required the

applicant to make the following certifications and authorizations, inter alia, relevant to this matter:

             a. The applicant was eligible to receive a loan under the rules (“PPP Rules”) in effect
                at the time this application was submitted;

             b. All SBA loan proceeds would be used only for business-related purposes as
                specified in the loan application and consistent with the PPP Rules;

             c. That funds would be used to retain workers and maintain payroll or make mortgage
                interest payments, lease payments, and utility payments, as specified under the PPP
                Rules;



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             d. That applicant would provide to the Lender documentation verifying the number of
                full-time equivalent employees on the Applicant’s payroll as well as the dollar
                amounts of payroll costs, covered mortgage interest payments, covered rent
                payments, and covered utilities for the eight-week period following the loan;

             e. That the applicant understood that loan forgiveness will be provided for the sum of
                documented payroll costs, covered mortgage interest payments, covered rent
                payments, and covered utilities, and not more than 25% of the forgiven amount may
                be for non-payroll costs; and

             f. That the information provided in the application and the information provided in all
                supporting documents and forms was true and accurate in all material respects.

   B. First Draw PPP Loan Forgiveness Applications

       32.      The First Draw PPP Loan Forgiveness Application Form 3508EZ, expiration date

October 31, 2020, required the eligible recipient to make the following certifications:

             a. That the dollar amount for which forgiveness was requested:

                       was used to pay costs that are eligible for forgiveness (payroll costs to retain
                        employees; business mortgage interest payments; business rent or lease
                        payments; or business utility payments);

                       included payroll costs equal to at least 60% of the forgiveness amount; and

                       if a 24-week Covered Period applied, did not exceed 2.5 months’ worth of
                        2019 compensation for any owner-employee or self-employed
                        individual/general partner, capped at $20,833 per individual.

             b. That the Borrower did not reduce salaries or hourly wages by more than 25 percent
                for any employee during the Covered Period or Alternative Payroll Covered Period
                compared to the period between January 1, 2020 and March 31, 2020;

             c. That the information provided in the application and the information provided in
                all supporting documents and forms was true and correct in all material respects
                and that the applicant understood that knowingly making a false statement to obtain
                forgiveness of an SBA-guaranteed loan is punishable under the law; and

             d. That the tax documents the applicant submitted to the Lender were consistent with
                those the Borrower has submitted/would submit to the IRS and/or state tax or
                workforce agency.

       In addition, the Authorized Representative of the Borrower must certify by initialing at

least ONE of the following two items:


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              e. That the Borrower did not reduce the number of employees or the average paid
                 hours of employees between January 1, 2020 and the end of the Covered Period
                 (other than any reductions that arose from an inability to rehire individuals who
                 were employees on February 15, 2020, if the Borrower was unable to hire similarly
                 qualified employees for unfilled positions on or before December 31, 2020, and
                 reductions in an employee’s hours that a borrower offered to restore and were
                 refused).

              f. That the Borrower was unable to operate between February 15, 2020, and the end
                 of the Covered Period at the same level of business activity as before February 15,
                 2020 due to compliance with requirements established or guidance issued between
                 March 1, 2020 and December 31, 2020, by certain federal governmental agencies,
                 related to the maintenance of standards of sanitation, social distancing, or any other
                 work or customer safety requirement related to COVID-19.

    C. Second Draw PPP Borrower Application Form

        33.      The Second Draw PPP Borrower Application Form, effective January 8, 2021,

required the applicant to make the following representations, authorizations, and certifications,

inter alia, relevant to this matter:

              a. That the applicant was eligible to receive a loan under the rules in effect at the time
                 the application was submitted;

              b. That all loan proceeds would be used only for business-related purposes as
                 specified in the loan application and consistent with the PPP Rules;

              c. That the applicant had realized a reduction in gross receipts in excess of 25%
                 relative to the relevant comparison time period;

              d. That the funds would be used to retain workers and maintain payroll; or make
                 payments for mortgage interest, rent, utilities, covered operations expenditures,
                 covered property damage costs, covered supplier costs, and covered worker
                 protection expenditures as specified under the Paycheck Protection Program Rules;

              e. That the applicant understood that loan forgiveness would be provided for the sum
                 of documented payroll costs, covered mortgage interest payments, covered rent
                 payments, covered utilities, covered operations expenditures, covered property
                 damage costs, covered supplier costs, and covered worker protection expenditures,
                 and not more than 40% of the forgiven amount may be for non-payroll costs; and

              f. That the information provided in the application and the information provided in
                 all supporting documents and forms was true and accurate in all material respects.




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   D. Second Draw PPP Loan Forgiveness Applications

       i.       Form 3508S (loans $150,000 or less)

       34.      The Second Draw PPP Loan Forgiveness Application Form 3508S, revised January

19, 2021, with an expiration date of July 31, 2021, required the eligible recipient to make the

following certifications:

             a. That the Borrower complied with all requirements in the PPP Rules, including the
                rules related to:

                       eligible uses of PPP loan proceeds;

                       the amount of PPP loan proceeds that must be used for payroll costs;

                       the calculation and documentation of the Borrower’s revenue reduction (if
                        applicable); and

                       the calculation of the Borrower’s Requested Loan Forgiveness Amount.

             b. That the information provided in this application was true and correct in all material
                respects and that applicant understood that knowingly making a false statement to
                obtain forgiveness of an SBA-guaranteed loan is punishable under the law.

       ii.      Form 3508EZ

       35.      The Second Draw PPP Loan Forgiveness Application Form 3508EZ, revised

January 19, 2021, expiration date July 31, 2021, required the eligible recipient to make the

following certifications:

             a. The dollar amount for which forgiveness is requested (which does not exceed the
                principal amount of the PPP loan):

                       was used to pay business costs that are eligible for forgiveness (payroll costs
                        to retain employees; business mortgage interest payments; business rent or
                        lease payments; business utility payments; covered operations
                        expenditures; covered property damage costs; covered supplier costs; or
                        covered worker protection expenditures);

                       includes payroll costs equal to at least 60% of the forgiveness amount; and




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                     for any owner-employee (with an ownership stake of 5% or more) or self-
                      employed individual/general partner, does not exceed 2.5 months’ worth of
                      compensation received during the year used to calculate the PPP loan
                      amount, capped at $20,833 per individual in total across all businesses.

          b. The Borrower did not reduce salaries or hourly wages of any employee by more
             than 25 percent for any employee during the Covered Period compared to the most
             recent quarter before the Covered Period;

          c. The Borrower used all First Draw PPP Loan amounts on eligible expenses prior to
             disbursement of the Second Draw PPP Loan;

          d. The information provided in this application and the information provided in all
             supporting documents and forms is true and correct in all material respects and
             applicant understand that knowingly making a false statement to obtain forgiveness
             of an SBA-guaranteed loan is punishable under the law; and

          e. The tax documents I have submitted to the Lender (if applicable) are consistent
             with those the Borrower has submitted or will submit to the IRS and/or state tax or
             workforce agency.

       In addition, the Authorized Representative of the Borrower must certify by initialing at

least ONE of the following two items:

          f. The Borrower did not reduce the number of employees or the average paid hours
             of employees between January 1, 2020 and the end of the Covered Period (other
             than any reductions that arose from an inability to rehire individuals who were
             employees on February 15, 2020, if the Borrower was unable to hire similarly
             qualified employees for unfilled positions on or before December 31, 2020 (or, for
             a PPP loan made after December 27, 2020, before the last day of the Covered
             Period), and reductions in an employee’s hours that a borrower offered to restore
             and were refused).

          g. The Borrower was unable to operate between February 15, 2020, and the end of the
             Covered Period at the same level of business activity as before February 15, 2020
             due to compliance with requirements established or guidance issued between
             March 1, 2020 and December 31, 2020 (or, for a PPP loan made after December
             27, 2020, requirements established or guidance issued before the last day of the
             Covered Period), by certain federal governmental agencies, related to the
             maintenance of standards of sanitation, social distancing, or any other work or
             customer safety requirement related to COVID-19.




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II.     The False Claims Act

        36.      Plaintiffs repeat and incorporate by reference each and every allegation contained

in the preceding paragraphs as if fully set forth herein.

        37.      The FCA provides, in pertinent part, that any person who:

        (a)(1)(A) knowingly presents, or causes to be presented, a false or fraudulent claim
        for payment or approval; [or]

        (a)(1)(B) knowingly makes, uses, or causes to be made or used, a false record or
        statement material to a false or fraudulent claim;

is liable to the United States for three times the amount of damages which the United States

sustains, plus a civil penalty per violation. 31 U.S.C. § 3729(a)(1).

        38. FCA penalties are regularly adjusted for inflation, pursuant to the Federal Civil

Penalties Inflation Adjustment Act Improvements Act of 2015. See 28 U.S.C. § 2461 note. For

violations occurring after November 2, 2015, the civil penalty amounts currently range from a

minimum of $13,946 to a maximum of $27,894. See 28 C.F.R. § 85.5.

        39. For purposes of the FCA, the terms "knowing" and "knowingly"

              a. mean that a person, with respect to information—

                       (i) has actual knowledge of the information;

                       (ii) acts in deliberate ignorance of the truth or falsity of the information; or

                       (iii) acts in reckless disregard of the truth or falsity of the information; and

              b. require no proof of specific intent to defraud.

31 U.S.C. § 3729(b)(1).

        40. Under the FCA, the term "claim" includes requests to the United States for

payment, whether made directly or indirectly to the United States. 31 U.S.C. § 3729(b)(2)(A).

        41. The FCA defines "material" to mean "having a natural tendency to influence, or

be capable of influencing, the payment or receipt of money or property.” 31 U.S.C. § 3729(b)(4).



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III.     FIRREA

         42.   Plaintiffs repeat and incorporate by reference each and every allegation contained

in the preceding paragraphs as if fully set forth herein.

         43.   Section 951 of FIRREA, as amended, codified at 12 U.S.C. § 1833a, provides that

the Attorney General may recover civil penalties of up to $1 million per violation against persons

who commit specified violations as established by a preponderance of the evidence. 28 C.F.R. §

85.5 (the maximum civil penalty was increased to $2,073,133 for assessments after December 13,

2021, for which violations occurred after November 2, 2015).

         44.   The statute further provides that the Attorney General alternatively may recover

the amount of any gain to the person committing the violation, or the amount of the loss to a

person other than the violator stemming from such conduct, up to the amount of the gain or the

loss. Id.

         45.   The predicate violations identified in Section 951 that can form the basis for

liability under FIRREA include, among others: (a) knowingly or willfully making a materially

false or fraudulent statement affecting a federally insured financial institution (18 U.S.C. § 1001);

(b) making a false statement on a loan application to a financial institution, "the accounts of which

are insured by the Federal Deposit Insurance Corporation" (18 U.S.C. § 1014); and (c) knowingly

making a false statement for the purpose of influencing a decision by the Administrator of the

SBA or to obtain a loan, money, or anything of value under the SBA's 7(a) program, including

the PPP (15 U.S.C. § 645(a)).

                                  FACTUAL BACKGROUND

I.       Dothan Hospitality

         46.   Plaintiffs repeat and incorporate by reference each and every allegation contained

in the preceding paragraphs as if fully set forth herein.



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    A. First Draw PPP Loan Application

         47.   On or before April 3, 2020, Dothan Hospitality applied for a First Draw PPP Loan

through Citizens National Bank of Meridian (“Lender”). A copy of Dothan Hospitality’s First

Draw PPP Loan Application is attached hereto as Exhibit A.

         48.   As part of its First Draw PPP Loan Application, Dothan Hospitality certified, inter

alia, that:

               a.      it was eligible to receive a loan under the rules in effect at the time the

application was submitted, with which Dothan Hospitality can prove its eligibility, specifically,

that it was engaged in a business with a NAICS code that begins with 72, had more than one

physical location, and had less than 500 employees per location as detailed in Exhibit A.

               b.      all SBA loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

               c.      funds would be used to retain workers and maintain payroll or make

mortgage interest payments, lease payments, and utility payments, as specified under the PPP

Rules.

               d.      it would provide to the Lender documentation verifying the number of full-

time equivalent employees on the Applicant’s payroll as well as the dollar amounts of payroll

costs, covered mortgage interest payments, covered rent payments, and covered utilities for the

covered period following the loan, with which Dothan Hospitality proved compliance, as

illustrated in Exhibit A.

               e.      the information provided in the application and the information provided in all

supporting documents and forms was true and accurate in all material respects.

         49.   On April 14, 2020, the Lender approved Dothan Hospitality’s First Draw PPP Loan

Application.


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        50.      On April 20, 2020, loan proceeds were disbursed to Dothan Hospitality and

deposited into Dothan Hospitality’s bank account ending in X-93265.

        51.      Dothan Hospitality complied with all certifications in its First Draw PPP Loan

Application.

    B. First Draw PPP Loan Forgiveness Application

        52.      As such, on November 19, 2020, Dothan Hospitality submitted a forgiveness

application for its First Draw PPP Loan (Form 350EZ).

        53.      As part of its First Draw PPP Loan Forgiveness application, Dothan Hospitality

certified, inter alia, that:

                 a.      the dollar amount for which forgiveness was requested was used to pay

costs that are eligible for forgiveness (payroll costs to retain employees; business mortgage interest

payments; business rent or lease payments; or business utility payments), with which Dothan

Hospitality proved compliance, as illustrated in Exhibit B, attached hereto;

                 b.      the dollar amount for which forgiveness was requested included payroll

costs equal to at least 60% of the forgiveness amount, with which Dothan Hospitality proved

compliance, as illustrated in Exhibit B;

                 c.      the dollar amount for which forgiveness was requested, for a 24-week

Covered Period, did not exceed 2.5 months’ worth of 2019 compensation for any owner-employee

or self-employed individual/general partner, capped at $20,833 per individual, with which Dothan

Hospitality proved compliance, as illustrated in Exhibit B;

                 d.      the Borrower did not reduce salaries or hourly wages by more than 25

percent for any employee during the Covered Period (8 weeks) or Alternative Payroll Covered

Period (24 weeks) compared to the period between January 1, 2020 and March 31, 2020, with

which Dothan Hospitality proved compliance, as illustrated in Exhibit B;



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                    e.     the information provided in the application and the information provided in

all supporting documents and forms was true and correct in all material respects and that the

applicant understood that knowingly making a false statement to obtain forgiveness of an SBA-

guaranteed loan is punishable under the law, with which Dothan Hospitality proved compliance,

as illustrated in Exhibit B;

                    f.     it did not reduce the number of employees or the average paid hours of

employees between January 1, 2020 and the end of the Covered Period, with which Dothan

Hospitality proved compliance, as illustrated in Exhibit B;

                    g.     it was unable to operate between February 15, 2020, and the end of the

Covered Period at the same level of business activity as before February 15, 2020 due to

compliance with requirements established or guidance issued between March 1, 2020 and

December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers

for Disease Control and Prevention, or the Occupational Safety and Health Administration, related

to the maintenance of standards of sanitation, social distancing, or any other work or customer

safety requirement related to COVID-19, with which Dothan Hospitality proved compliance, as

illustrated in Exhibit B.

        54.         On December 8, 2020, Dothan Hospitality received notification that its First Draw

PPP Loan had been forgiven.

    C. Second Draw PPP Loan Application

        55.         On January 12, 2021, Dothan Hospitality applied for a Second Draw PPP Loan

through Citizens National Bank of Meridian (“Lender”). A copy of Dothan Hospitality’s Second

Draw PPP Loan Application is attached hereto as Exhibit C.

        56.         As part of its Second Draw PPP Loan Application, Dothan Hospitality certified,

inter alia, that:



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                a.     it was eligible to receive a loan under the rules in effect at the time the

application was submitted, which Dothan Hospitality submitted, proving its eligibility,

specifically, that it was a that it was engaged in a business with a NAICS code that begins with 72,

had more than one physical location, and had less than 500 employees per location as detailed in

Exhibit C.

                b.     all loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

                c.     it had realized a reduction in gross receipts in excess of 25% relative to the

relevant comparison time period, with which Dothan Hospitality proved compliance, as illustrated

in Exhibit C.

                d.     the funds would be used to retain workers and maintain payroll; or make

payments for mortgage interest, rent, utilities, covered operations expenditures, covered property

damage costs, covered supplier costs, and covered worker protection expenditures as specified

under the Paycheck Protection Program Rules.

                e.     the information provided in the application and the information provided in

all supporting documents and forms was true and accurate in all material respects.

       57.      On January 22, 2021, the Lender approved Dothan Hospitality’s application for a

Second Draw PPP Loan.

       58.      On March 8, 2021, loan proceeds were disbursed to Dothan Hospitality and

deposited into Dothan Hospitality’s bank account ending in X-93265.

       59.      Dothan Hospitality complied with all certifications in its Second Draw PPP Loan

Application.




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    D. Second Draw PPP Loan Forgiveness Application

        60.      As such, on July 19, 2021, Dothan Hospitality submitted a forgiveness application

for its Second Draw PPP Loan (Form 3508S).

        61.      As part of its Second Draw PPP Loan Forgiveness Application, Dothan Hospitality

certified, inter alia, that:

                 a.      That the Borrower complied with all requirements in the PPP Rules,

including the rules related to:

                                 eligible uses of PPP loan proceeds, with which Dothan Hospitality

proved compliance, as illustrated in Exhibit D, attached hereto;

                                 the amount of PPP loan proceeds that must be used for payroll costs,

with which Dothan Hospitality proved compliance, as illustrated in Exhibit D;

                                 the calculation and documentation of the Borrower’s revenue

reduction (if applicable), with which Dothan Hospitality proved compliance, as illustrated in

Exhibit D; and

                                 the calculation of the Borrower’s Requested Loan Forgiveness

Amount, with which Dothan Hospitality proved compliance, as illustrated in Exhibit D.

                 b.      That the information provided in this application was true and correct in all

material respects and that applicant understood that knowingly making a false statement to obtain

forgiveness of an SBA-guaranteed loan is punishable under the law, with which Dothan

Hospitality proved compliance, as illustrated in Exhibit D.

        62.      On June 30, 2022, Dothan Hospitality received notification that the SBA would not

forgive its Second Draw PPP Loan because Dothan Hospitality and its affiliates exceeded the

corporate limit for Second Draw PPP Loan forgiveness. Dothan Hospitality timely appealed this

decision, and SBA “charged off” the loan as to Dothan Hospitality’s Lender, as illustrated in



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Exhibit E, attached hereto.

         63.    Despite the charge off to the Lender, Dothan Hospitality remains liable for the

repayment of its Second Draw PPP Loan and interest, because SBA has not provided any

correspondence to Dothan Hospitality that its Second Draw PPP Loan is forgiven.

         64.    On January 24, 2022, Dothan Hospitality received a CID from Defendant DOJ

requesting responses to Interrogatories and production of documents related to its application for

PPP loans and loan forgiveness.

         65.    As of July 10, 2024, despite having appealed SBA’s decision on its Second Draw

PPP Loan Forgiveness Application, Dothan Hospitality has not received notification that its

Second Draw PPP Loan has been forgiven, presumably due to DOJ’s investigation. As such, an

actual case and controversy exists.

II.      Enterprise Hotels

         66.    Plaintiffs repeat and incorporate by reference each and every allegation contained

in the preceding paragraphs as if fully set forth herein.

      A. First Draw PPP Loan Application

         67.    On or before April 3, 2020, Enterprise Hotels applied for a First Draw PPP Loan

through Citizens National Bank (“Lender”). A copy of Enterprise Hotels’ First Draw PPP Loan

Application is attached hereto as Exhibit F.

         68.    As part of its First Draw PPP Loan application, Enterprise Hotels certified, inter

alia, that:

                a.     it was eligible to receive a loan under the rules in effect at the time the

application was submitted, which Enterprise Hotels submitted, proving its eligibility, specifically,

that it was engaged in a business with a NAICS code that begins with 72, had more than one

physical location, and had less than 500 employees per location as detailed in Exhibit F.



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                 b.      all SBA loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

                 c.      funds would be used to retain workers and maintain payroll or make

mortgage interest payments, lease payments, and utility payments, as specified under the PPP

Rules.

                 d.      it would provide to the Lender documentation verifying the number of full-

time equivalent employees on the Applicant’s payroll as well as the dollar amounts of payroll

costs, covered mortgage interest payments, covered rent payments, and covered utilities for the

covered period following the loan, with which Enterprise Hotels proved compliance, as illustrated

in Exhibit F.

                 e.      the information provided in the application and the information provided in all

supporting documents and forms was true and accurate in all material respects.

         69.     On February 13, 2020, the Lender approved Enterprise Hotels’ application.

         70.     On February 24, 2021, loan proceeds were disbursed to Enterprise Hotels and

deposited into Enterprise Hotels’ bank account ending in X-08218.

         71.     Enterprise Hotels complied with all certifications in its First Draw PPP Loan

Application.

    B. First Draw PPP Loan Forgiveness Application

         72.     On November 19, 2020, Enterprise Hotels submitted a forgiveness application for

its First Draw PPP Loan (Form 3508EZ).

         73.     As part of its First Draw PPP Loan Forgiveness application, Enterprise Hotels

certified, inter alia, that:

                 a.      the dollar amount for which forgiveness was requested was used to pay

costs that are eligible for forgiveness (payroll costs to retain employees; business mortgage interest



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payments; business rent or lease payments; or business utility payments), with which Enterprise

Hotels proved compliance, as illustrated in Exhibit G, attached hereto;

               b.      the dollar amount for which forgiveness was requested included payroll

costs equal to at least 60% of the forgiveness amount, with which Enterprise Hotels proved

compliance, as illustrated in Exhibit G;

               c.      the dollar amount for which forgiveness was requested, for a 24-week

Covered Period, did not exceed 2.5 months’ worth of 2019 compensation for any owner-employee

or self-employed individual/general partner, capped at $20,833 per individual, with which

Enterprise Hotels proved compliance, as illustrated in Exhibit G;

               d.      the Borrower did not reduce salaries or hourly wages by more than 25

percent for any employee during the Covered Period (8 weeks) or Alternative Payroll Covered

Period (24 weeks) compared to the period between January 1, 2020 and March 31, 2020, with

which Enterprise Hotels proved compliance, as illustrated in Exhibit G;

               e.      the information provided in the application and the information provided in

all supporting documents and forms was true and correct in all material respects and that the

applicant understood that knowingly making a false statement to obtain forgiveness of an SBA-

guaranteed loan is punishable under the law, with which Enterprise Hotels proved compliance, as

illustrated in Exhibit G;

               f.      it did not reduce the number of employees or the average paid hours of

employees between January 1, 2020 and the end of the Covered Period, with which Enterprise

Hotels proved compliance, as illustrated in Exhibit G;

               g.      it was unable to operate between February 15, 2020, and the end of the

Covered Period at the same level of business activity as before February 15, 2020 due to

compliance with requirements established or guidance issued between March 1, 2020 and



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December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers

for Disease Control and Prevention, or the Occupational Safety and Health Administration, related

to the maintenance of standards of sanitation, social distancing, or any other work or customer

safety requirement related to COVID-19, with which Enterprise Hotels proved compliance, as

illustrated in Exhibit G.

        74.     On December 18, 2020, Enterprise Hotels received notification that its First Draw

PPP Loan had been forgiven.

    C. Second Draw PPP Loan Application

        75.     On January 12, 2021, Enterprise Hotels applied for a Second Draw PPP Loan

through Citizens National Bank of Meridian (“Lender”). A copy of Enterprise Hotels’ Second

Draw PPP Loan Application is attached hereto as Exhibit H.

        76.     As part of its First Draw PPP Loan Application, Enterprise Hotels certified, inter

alia, that:

                a.     it was eligible to receive a loan under the rules in effect at the time the

application was submitted, which Enterprise Hotels submitted, proving its eligibility, specifically,

that it was engaged in a business with a NAICS code that begins with 72, had more than one

physical location, and had less than 500 employees per location as detailed in Exhibit H.

                b.     all loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

                c.     it had realized a reduction in gross receipts in excess of 25% relative to the

relevant comparison time period, with which Enterprise Hotels proved compliance, as illustrated

in Exhibit H.

                d.     the funds would be used to retain workers and maintain payroll; or make

payments for mortgage interest, rent, utilities, covered operations expenditures, covered property



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damage costs, covered supplier costs, and covered worker protection expenditures as specified

under the Paycheck Protection Program Rules.

                 e.      the information provided in the application and the information provided in

all supporting documents and forms was true and accurate in all material respects.

         77.     On January 21, 2021, the Lender approved Enterprise Hotels’ Second Draw PPP

Loan Application.

         78.     On February 3, 2021, loan proceeds were disbursed to Enterprise Hotels and

deposited into Enterprise Hotels’ bank account ending in X-08218.

         79.     Enterprise Hotels complied with all certifications in its Second Draw PPP Loan

Application.

    D. Second Draw PPP Loan Forgiveness Application

         80.     On July 19, 2021, Enterprise Hotels submitted a forgiveness application for its

Second Draw PPP Loan (Form 3508S).

         81.     As part of its Second Draw PPP Loan Forgiveness Application, Enterprise Hotels

certified, inter alia, that:

                 a.      That the Borrower complied with all requirements in the PPP Rules,

including the rules related to:

                                 eligible uses of PPP loan proceeds, with which Enterprise Hotels

proved compliance, as illustrated in Exhibit I, attached hereto;

                                 the amount of PPP loan proceeds that must be used for payroll costs,

with which Enterprise Hotels proved compliance, as illustrated in Exhibit I;

                                 the calculation and documentation of the Borrower’s revenue

reduction (if applicable), with which Enterprise Hotels proved compliance, as illustrated in Exhibit

I; and



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                              the calculation of the Borrower’s Requested Loan Forgiveness

Amount, with which Enterprise Hotels proved compliance, as illustrated in Exhibit I.

                b.     That the information provided in this application was true and correct in all

material respects and that applicant understood that knowingly making a false statement to obtain

forgiveness of an SBA-guaranteed loan is punishable under the law, with which Enterprise Hotels

proved compliance, as illustrated in Exhibit I.

          82.   Enterprise Hotels received notification from SBA that its Second Draw PPP Loan

Forgiveness Application had been denied. Enterprise Hotels timely appealed this decision, and

SBA “charged off” the loan as to Enterprise Hotels’ Lender, as illustrated in Exhibit J, attached

hereto.

          83.   Despite the charge off to the Lender, Enterprise Hotels remains liable for the

repayment of its Second Draw PPP Loan and interest, because SBA has not provided any

correspondence to Enterprise Hotels that its Second Draw PPP Loan is forgiven.

          84.   On January 24, 2022, Enterprise Hotels received a CID from Defendant DOJ

requesting responses to Interrogatories and production of documents related to its application for

PPP loans and loan forgiveness.

          85.    As of July 10, 2024, despite having appealed the SBA’s denial of its Second Draw

PPP Loan Forgiveness Application, Enterprise Hotels has not received a notification that its

Second Draw PPP Loan has been forgiven, presumably due to DOJ’s investigation. As such, an

actual case and controversy exists.

III.      Enterprise Hospitality

          86.   Plaintiffs repeat and incorporate by reference each and every allegation contained

in the preceding paragraphs as if fully set forth herein.




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    A. First Draw PPP Loan Application

         87.        On or before April 3, 2020, Enterprise Hospitality applied for a First Draw PPP

Loan through Citizens National Bank (“Lender”). A copy of Enterprise Hospitality’s First Draw

PPP Loan Application is attached hereto as Exhibit K.

         88.        As part of its First Draw PPP Loan Application, Enterprise Hospitality certified,

inter alia, that:

                    a.     it was eligible to receive a loan under the rules in effect at the time the

application was submitted, which Enterprise Hospitality submitted, proving its eligibility,

specifically, that it was engaged in a business with a NAICS code that begins with 72, had more

than one physical location, and had less than 500 employees per location as detailed in Exhibit K.

                    b.     all SBA loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

                    c.     funds would be used to retain workers and maintain payroll or make

mortgage interest payments, lease payments, and utility payments, as specified under the PPP

Rules.

                    d.     it would provide to the Lender documentation verifying the number of full-

time equivalent employees on the Applicant’s payroll as well as the dollar amounts of payroll

costs, covered mortgage interest payments, covered rent payments, and covered utilities for the

covered period following the loan, with which Enterprise Hospitality proved compliance, as

illustrated in Exhibit K.

                    e.     the information provided in the application and the information provided in all

supporting documents and forms was true and accurate in all material respects.

         89.        On April 13, 2020, the Lender approved Enterprise Hospitality’s application.




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        90.      On April 20, 2020, loan proceeds were disbursed to Enterprise Hospitality and

deposited into Enterprise Hospitality’s bank account ending in X-32344.

        91.      Enterprise Hospitality complied with all certifications in its First Draw PPP Loan

Application.

    B. First Draw PPP Loan Forgiveness Application

        92.      On November 19, 2020, Enterprise Hospitality submitted a forgiveness application

for its First Draw PPP Loan (Form 3508EZ).

        93.      As part of its First Draw PPP Loan Forgiveness Application, Enterprise Hospitality

certified, inter alia, that:

                 a.      the dollar amount for which forgiveness was requested was used to pay

costs that are eligible for forgiveness (payroll costs to retain employees; business mortgage interest

payments; business rent or lease payments; or business utility payments), with which Enterprise

Hospitality proved compliance, as illustrated in Exhibit L, attached hereto;

                 b.      the dollar amount for which forgiveness was requested included payroll

costs equal to at least 60% of the forgiveness amount, with which Enterprise Hospitality proved

compliance, as illustrated in Exhibit L;

                 c.      the dollar amount for which forgiveness was requested, for a 24-week

Covered Period, did not exceed 2.5 months’ worth of 2019 compensation for any owner-employee

or self-employed individual/general partner, capped at $20,833 per individual, with which

Enterprise Hospitality proved compliance, as illustrated in Exhibit L;

                 d.      the Borrower did not reduce salaries or hourly wages by more than 25

percent for any employee during the Covered Period (8 weeks) or Alternative Payroll Covered

Period (24 weeks) compared to the period between January 1, 2020 and March 31, 2020, with

which Enterprise Hospitality proved compliance, as illustrated in Exhibit L;



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                    e.     the information provided in the application and the information provided in

all supporting documents and forms was true and correct in all material respects and that the

applicant understood that knowingly making a false statement to obtain forgiveness of an SBA-

guaranteed loan is punishable under the law, with which Enterprise Hospitality proved compliance,

as illustrated in Exhibit L;

                    f.     it did not reduce the number of employees or the average paid hours of

employees between January 1, 2020 and the end of the Covered Period, with which Enterprise

Hospitality proved compliance, as illustrated in Exhibit L;

        94.         it was unable to operate between February 15, 2020, and the end of the Covered

Period at the same level of business activity as before February 15, 2020 due to compliance with

requirements established or guidance issued between March 1, 2020 and December 31, 2020, by

the Secretary of Health and Human Services, the Director of the Centers for Disease Control and

Prevention, or the Occupational Safety and Health Administration, related to the maintenance of

standards of sanitation, social distancing, or any other work or customer safety requirement related

to COVID-19, with which Enterprise Hospitality proved compliance, as illustrated in Exhibit L.

        95.         On December 8, 2020, Enterprise Hospitality received notification that its First

Draw PPP Loan had been forgiven.

    C. Second Draw PPP Loan Application

        96.         On January 12 ,2021, Enterprise Hospitality applied for a Second Draw PPP Loan

through Citizens National Bank of Meridian (“Lender”). A copy of Enterprise Hospitality’s

Second PPP Loan Application is attached hereto as Exhibit M.

        97.         As part of its Second Draw PPP Loan Application, Enterprise Hospitality certified,

inter alia, that:




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               a.      it was eligible to receive a loan under the rules in effect at the time the

application was submitted, which Enterprise Hospitality submitted, proving its eligibility,

specifically, that it was engaged in a business with a NAICS code that begins with 72, had more

than one physical location, and had less than 500 employees per location as detailed in Exhibit M.

               b.      all loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

               c.      it had realized a reduction in gross receipts in excess of 25% relative to the

relevant comparison time period, with which Enterprise Hospitality proved compliance, as

illustrated in Exhibit M.

               d.      the funds would be used to retain workers and maintain payroll; or make

payments for mortgage interest, rent, utilities, covered operations expenditures, covered property

damage costs, covered supplier costs, and covered worker protection expenditures as specified

under the Paycheck Protection Program Rules.

               e.      the information provided in the application and the information provided in

all supporting documents and forms was true and accurate in all material respects.

       98.     On January 23, 2021, the Lender approved Enterprise Hospitality’s application.

       99.     On February 1, 2021, loan proceeds were disbursed to Enterprise Hospitality and

deposited into Enterprise Hospitality’s bank account ending in X-32344.

       100.    Enterprise Hospitality complied with all certifications in its First Draw PPP Loan

Application.

   D. Second Draw PPP Loan Forgiveness Application

       101.    On July 19, 2021, Enterprise Hospitality submitted a forgiveness application for its

Second Draw PPP Loan (Form 3508S).




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          102.   As part of its Second Draw PPP Loan Forgiveness Application, Enterprise

Hospitality certified, inter alia, that:

                 a.     That the Borrower complied with all requirements in the PPP Rules,

including the rules related to:

                                 eligible uses of PPP loan proceeds, with which Enterprise

Hospitality proved compliance, as illustrated in Exhibit N, attached hereto;

                                 the amount of PPP loan proceeds that must be used for payroll costs,

with which Enterprise Hospitality proved compliance, as illustrated in Exhibit N;

                                 the calculation and documentation of the Borrower’s revenue

reduction (if applicable), with which Enterprise Hospitality proved compliance, as illustrated in

Exhibit N; and

                                 the calculation of the Borrower’s Requested Loan Forgiveness

Amount, with which Enterprise Hospitality proved compliance, as illustrated in Exhibit N.

                 b.     That the information provided in this application was true and correct in all

material respects and that applicant understood that knowingly making a false statement to obtain

forgiveness of an SBA-guaranteed loan is punishable under the law, with which Enterprise

Hospitality proved compliance, as illustrated in Exhibit N.

          103.   On July 26, 2021, Enterprise Hospitality received notification that its Second Draw

PPP Loan had been forgiven.

          104.   Despite SBA forgiving Enterprise Hospitality’s First and Second PPP loans,

Enterprise Hospitality received a CID from Defendant DOJ requesting responses to Interrogatories

and production of documents related to its application for PPP loans and loan forgiveness. As such,

Enterprise Hospitality is under active investigation from DOJ, and an actual case and controversy

exists.



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IV.      Hope Hull

         105.   Hope Hull repeats and incorporates by reference each and every allegation

contained in the preceding paragraphs as if fully set forth herein.

      A. First Draw PPP Loan Application

         106.   On or before April 3, 2020, Hope Hull applied for a First Draw PPP Loan through

Citizens National Bank of Meridian (“Lender”). A copy of Hope Hull’s First Draw PPP Loan

Application is attached hereto as Exhibit O.

         107.   As part of its First Draw PPP Loan Application, Hope Hull certified, inter alia, that:

                a.     it was eligible to receive a loan under the rules in effect at the time the

application was submitted, proving its eligibility, specifically, that it was engaged in a business

with a NAICS code that begins with 72, had more than one physical location, and had less than

500 employees per location as detailed in Exhibit O.

                b.     all SBA loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

                c.     funds would be used to retain workers and maintain payroll or make

mortgage interest payments, lease payments, and utility payments, as specified under the PPP

Rules.

                d.     it would provide to the Lender documentation verifying the number of full-

time equivalent employees on the Applicant’s payroll as well as the dollar amounts of payroll

costs, covered mortgage interest payments, covered rent payments, and covered utilities for the

covered period following the loan, with which Hope Hull proved compliance, as illustrated in

Exhibit O.

                e.     the information provided in the application and the information provided in all

supporting documents and forms was true and accurate in all material respects.



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        108.        On April 11, 2020, the Lender approved Hope Hull’s application.

        109.        On April 20, 2020, loan proceeds were disbursed to Hope Hull and deposited into

Hope Hull’s bank account ending in X-22521.

        110.        Hope Hull complied with all certifications in its First Draw PPP Loan Application.

    B. First Draw PPP Loan Forgiveness Application

        111.        On November 20, 2020, Hope Hull submitted a forgiveness application for its First

Draw PPP Loan (Form 3508EZ).

        112.        As part of its First Draw PPP Loan Forgiveness application, Hope Hull certified,

inter alia, that:

                    a.     the dollar amount for which forgiveness was requested was used to pay

costs that are eligible for forgiveness (payroll costs to retain employees; business mortgage interest

payments; business rent or lease payments; or business utility payments), with which Hope Hull

proved compliance, as illustrated in Exhibit P, attached hereto;

                    b.     the dollar amount for which forgiveness was requested included payroll

costs equal to at least 60% of the forgiveness amount, with which Hope Hull proved compliance,

as illustrated in Exhibit P;

                    c.     the dollar amount for which forgiveness was requested, for a 24-week

Covered Period, did not exceed 2.5 months’ worth of 2019 compensation for any owner-employee

or self-employed individual/general partner, capped at $20,833 per individual, with which Hope

Hull proved compliance, as illustrated in Exhibit P;

                    d.     the Borrower did not reduce salaries or hourly wages by more than 25

percent for any employee during the Covered Period (8 weeks) or Alternative Payroll Covered

Period (24 weeks) compared to the period between January 1, 2020 and March 31, 2020, with

which Hope Hull proved compliance, as illustrated in Exhibit P;



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                e.      the information provided in the application and the information provided in

all supporting documents and forms was true and correct in all material respects and that the

applicant understood that knowingly making a false statement to obtain forgiveness of an SBA-

guaranteed loan is punishable under the law, with which Hope Hull proved compliance, as

illustrated in Exhibit P;

                f.      it did not reduce the number of employees or the average paid hours of

employees between January 1, 2020 and the end of the Covered Period, with which Hope Hull

proved compliance, as illustrated in Exhibit P;

                g.      it was unable to operate between February 15, 2020, and the end of the

Covered Period at the same level of business activity as before February 15, 2020 due to

compliance with requirements established or guidance issued between March 1, 2020 and

December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers

for Disease Control and Prevention, or the Occupational Safety and Health Administration, related

to the maintenance of standards of sanitation, social distancing, or any other work or customer

safety requirement related to COVID-19, with which Hope Hull proved compliance, as illustrated

in Exhibit P.

        113.    On December 8, 2020, Hope Hull received notification that its First Draw PPP Loan

had been forgiven.

    C. Second Draw PPP Loan Application

        114.    On January 12, 2021, Hope Hull applied for a Second Draw PPP Loan through

Citizens National Bank of Meridian (“Lender”). A copy of Hope Hull’s Second Draw PPP Loan

Application is attached hereto as Exhibit Q.

        115.    As part of its Second Draw PPP Loan Application, Hope Hull certified, inter alia,

that:



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               a.      it was eligible to receive a loan under the rules in effect at the time the

application was submitted, which Hope Hull submitted, proving its eligibility, specifically, that it

was engaged in a business with a NAICS code that begins with 72, had more than one physical

location, and had less than 500 employees per location as detailed in Exhibit Q.

               b.      all loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

               c.      it had realized a reduction in gross receipts in excess of 25% relative to the

relevant comparison time period, with which Hope Hull proved compliance, as illustrated in

Exhibit Q.

               d.      the funds would be used to retain workers and maintain payroll; or make

payments for mortgage interest, rent, utilities, covered operations expenditures, covered property

damage costs, covered supplier costs, and covered worker protection expenditures as specified

under the Paycheck Protection Program Rules.

               e.      the information provided in the application and the information provided in

all supporting documents and forms was true and accurate in all material respects.

       116.    On January 25, 2021, the Lender approved Hope Hull’s application.

       117.    On February 1, 2021, loan proceeds were disbursed to Hope Hull and deposited

into Hope Hull’s bank account ending in X-22521.

       118.    Hope Hull complied with all certifications in its Second Draw PPP Loan

Application.

   D. Second Draw PPP Loan Forgiveness Application

       119.    On July 19, 2021, Hope Hull submitted a forgiveness application for its Second

Draw PPP Loan (Form 3508S).




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        120.    As part of its Second Draw PPP Loan Forgiveness Application, Hope Hull certified

that:

                a.      the dollar amount for which forgiveness was requested was used to pay

costs that are eligible for forgiveness (payroll costs to retain employees; business mortgage interest

payments; business rent or lease payments; or business utility payments), with which Hope Hull

proved compliance, as illustrated in Exhibit R, attached hereto;

                b.      the dollar amount for which forgiveness was requested included payroll

costs equal to at least 60% of the forgiveness amount, with which Hope Hull proved compliance,

as illustrated in Exhibit R;

                c.      the dollar amount for which forgiveness was requested, for a 24-week

Covered Period, did not exceed 2.5 months’ worth of 2019 compensation for any owner-employee

or self-employed individual/general partner, capped at $20,833 per individual, with which Hope

Hull proved compliance, as illustrated in Exhibit R;

                d.      the Borrower did not reduce salaries or hourly wages by more than 25

percent for any employee during the Covered Period (8 weeks) or Alternative Payroll Covered

Period (24 weeks) compared to the period between January 1, 2020 and March 31, 2020, with

which Hope Hull proved compliance, as illustrated in Exhibit R;

                e.      the information provided in the application and the information provided in

all supporting documents and forms was true and correct in all material respects and that the

applicant understood that knowingly making a false statement to obtain forgiveness of an SBA-

guaranteed loan is punishable under the law, with which Hope Hull proved compliance, as

illustrated in Exhibit R;

                f.      it did not reduce the number of employees or the average paid hours of

employees between January 1, 2020 and the end of the Covered Period, with which Hope Hull



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proved compliance, as illustrated in Exhibit R;

                g.      it was unable to operate between February 15, 2020, and the end of the

Covered Period at the same level of business activity as before February 15, 2020 due to

compliance with requirements established or guidance issued between March 1, 2020 and

December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers

for Disease Control and Prevention, or the Occupational Safety and Health Administration, related

to the maintenance of standards of sanitation, social distancing, or any other work or customer

safety requirement related to COVID-19, with which Hope Hull proved compliance, as illustrated

in Exhibit R.

       121.     Hope Hull received notification from SBA that its Second Draw PPP Loan

Forgiveness Application had been denied. Hope Hull timely appealed this decision, and SBA

“charged off” the loan as to Hope Hull’s Lender, as illustrated in Exhibit S, attached hereto.

       122.     Despite the charge off to the Lender, Hope Hull remains liable for the repayment

of its Second Draw PPP Loan and interest, because SBA has not provided any correspondence to

Hope Hull that its Second Draw PPP Loan has been forgiven.

       123.     On January 24, 2022, Hope Hull received a CID from Defendant DOJ requesting

responses to Interrogatories and production of documents related to its application for PPP loans

and loan forgiveness.

       124.     As of July 10, 2024, despite having appealed the SBA’s denial of its Second Draw

PPP Loan Forgiveness Application, Hope Hull has not received a notification that its Second Draw

PPP Loan has been forgiven, presumably due to DOJ’s investigation. As such, an actual case and

controversy exists.




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V.       Montgomery Downtown

         121.       Montgomery Downtown repeats and incorporates by reference each and every

allegation contained in the preceding paragraphs as if fully set forth herein.

     A. First Draw PPP Loan Application

         122.       On or before April 3, 2020, Montgomery Downtown applied for a First Draw PPP

Loan through Citizens National Bank of Meridian (“Lender”). A copy of Montgomery

Downtown’s First Draw PPP Loan Application is attached hereto as Exhibit T.

         123.       As part of its First Draw PPP Loan Application, Montgomery Downtown certified,

inter alia, that:

                    a.     it was eligible to receive a loan under the rules in effect at the time the

application was submitted, with which Montgomery Downtown can prove compliance,

specifically, that it was engaged in a business with a NAICS code that begins with 72, had more

than one physical location, and had less than 500 employees per location as detailed in Exhibit T.

                    b.     all SBA loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

                    c.     funds would be used to retain workers and maintain payroll or make

mortgage interest payments, lease payments, and utility payments, as specified under the PPP

Rules.

                    d.     it would provide to the Lender documentation verifying the number of full-

time equivalent employees on the Applicant’s payroll as well as the dollar amounts of payroll

costs, covered mortgage interest payments, covered rent payments, and covered utilities for the

covered period following the loan, with which Montgomery Downtown proved compliance, as

illustrated in Exhibit T.




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               e.      the information provided in the application and the information provided in all

supporting documents and forms was true and accurate in all material respects.

       124.    On April 11, 2020, the Lender approved Montgomery Downtown’s application.

       125.    On April 20, 2020, loan proceeds were disbursed to Montgomery Downtown and

deposited into Montgomery Downtown’s bank account ending in X-22955.

       126.    Montgomery Downtown complied with all certifications in its First Draw PPP Loan

Application.

   B. First Draw PPP Loan Forgiveness Application

       127.    On November 20, 2020, Montgomery Downtown submitted a forgiveness

application for its First Draw PPP Loan (Form 3508EZ).

       128.    As part of its First Draw PPP Loan Forgiveness Application, Montgomery

Downtown certified, inter alia, that:

               a.      the dollar amount for which forgiveness was requested was used to pay

costs that are eligible for forgiveness (payroll costs to retain employees; business mortgage interest

payments; business rent or lease payments; or business utility payments), with which Montgomery

Downtown proved compliance, as illustrated in Exhibit U, attached hereto;

               b.      the dollar amount for which forgiveness was requested included payroll

costs equal to at least 60% of the forgiveness amount, with which Montgomery Downtown proved

compliance, as illustrated in Exhibit U;

               c.      the dollar amount for which forgiveness was requested, for a 24-week

Covered Period, did not exceed 2.5 months’ worth of 2019 compensation for any owner-employee

or self-employed individual/general partner, capped at $20,833 per individual, with which

Montgomery Downtown proved compliance, as illustrated in Exhibit U;




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               d.      the Borrower did not reduce salaries or hourly wages by more than 25

percent for any employee during the Covered Period (8 weeks) or Alternative Payroll Covered

Period (24 weeks) compared to the period between January 1, 2020 and March 31, 2020, with

which Montgomery Downtown proved compliance, as illustrated in Exhibit U;

               e.      the information provided in the application and the information provided in

all supporting documents and forms was true and correct in all material respects and that the

applicant understood that knowingly making a false statement to obtain forgiveness of an SBA-

guaranteed loan is punishable under the law, with which Montgomery Downtown proved

compliance, as illustrated in Exhibit U;

               f.      it did not reduce the number of employees or the average paid hours of

employees between January 1, 2020 and the end of the Covered Period, with which Montgomery

Downtown proved compliance, as illustrated in Exhibit U; and

               g.      it was unable to operate between February 15, 2020, and the end of the

Covered Period at the same level of business activity as before February 15, 2020 due to

compliance with requirements established or guidance issued between March 1, 2020 and

December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers

for Disease Control and Prevention, or the Occupational Safety and Health Administration, related

to the maintenance of standards of sanitation, social distancing, or any other work or customer

safety requirement related to COVID-19, with which Montgomery Downtown proved compliance,

as illustrated in Exhibit U.

       129.    On December 8, 2020, Montgomery Downtown received notification that its First

Draw PPP Loan had been forgiven.




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    C. Second Draw PPP Loan Application

        130.     On January 12, 2021, Montgomery Downtown applied for a Second Draw PPP

Loan through Citizens National Bank of Meridian (“Lender”). A copy of Montgomery

Downtown’s Second Draw PPP Loan Application is attached hereto as Exhibit V.

        131.     As part of its Second Draw PPP Loan Application, Montgomery Downtown

certified, inter alia, that:

                 a.      it was eligible to receive a loan under the rules in effect at the time the

application was submitted, which Montgomery Downtown submitted, proving its eligibility,

specifically, that it was engaged in a business with a NAICS code that begins with 72, had more

than one physical location, and had less than 500 employees per location as detailed in Exhibit V.

                 b.      all loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

                 c.      it had realized a reduction in gross receipts in excess of 25% relative to the

relevant comparison time period, with which Montgomery Downtown proved compliance, as

illustrated in Exhibit V.

                 d.      the funds would be used to retain workers and maintain payroll; or make

payments for mortgage interest, rent, utilities, covered operations expenditures, covered property

damage costs, covered supplier costs, and covered worker protection expenditures as specified

under the Paycheck Protection Program Rules.

                 e.      the information provided in the application and the information provided in

all supporting documents and forms was true and accurate in all material respects..

        132.     On January 21, 2021, the Lender approved Montgomery Downtown’s application.

        133.     On February 1, 2021, loan proceeds were disbursed to Montgomery Downtown and

deposited into Montgomery Downtown’s bank account ending in X-22955.



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       134.    Montgomery Downtown complied with all certifications in its Second Draw PPP

Loan Application.

   D. Second Draw PPP Loan Forgiveness Application

       135.    On August 2, 2021, Montgomery Downtown submitted a forgiveness application

for its Second Draw PPP Loan (Form 3508EZ).

       136.    As part of its Second Draw PPP Loan Forgiveness Application, Montgomery

Downtown certified, inter alia, that:

               a.        the dollar amount for which forgiveness was requested:

                     (i) was used to pay business costs that were eligible for forgiveness, with which

Montgomery Downtown proved compliance, as illustrated in Exhibit W, attached hereto;

                    (ii) included payroll costs equal to at least 60% of the forgiveness amount, with

which Montgomery Downtown proved compliance, as illustrated in Exhibit W;

                    (iii) did not exceed 2.5 months’ worth of 2019 compensation for any owner-

employee or self-employed individual/general partner, capped at $20,833 per individual in total

across all businesses, during the year used to calculate the PPP loan amount, with which

Montgomery Downtown proved compliance, as illustrated in Exhibit W;

               b.        the Borrower did not reduce salaries or hourly wages of any employee by

more than 25 percent for any employee during the Covered Period compared to the most recent

quarter before the Covered Period, with which Montgomery Downtown proved compliance, as

illustrated in Exhibit W;

               c.        the Borrower submitted to the Lender the required documentation verifying

payroll costs, the existence of obligations and service (as applicable) prior to February 15, 2020,

and eligible business mortgage interest payments, business rent or lease payments, business utility

payments, covered operations expenditures, covered property damage costs, covered supplier



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costs, and covered worker protection expenditures, with which Montgomery Downtown proved

compliance, as illustrated in Exhibit W;

               d.      the information provided in the application and the information provided in

all supporting documents and forms was true and correct in all material respects;

               e.      the Borrower did not reduce the number of employees or the average paid

hours of employees between January 1, 2020 and the end of the Covered Period, with which

Montgomery Downtown proved compliance, as illustrated in Exhibit W; and

               f.      the Borrower was unable to operate between February 15, 2020, and the end

of the Covered Period at the same level of business activity as before February 15, 2020 due to

compliance with requirements established or guidance issued between March 1, 2020 and

December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers

for Disease Control and Prevention, or the Occupational Safety and Health Administration, related

to the maintenance of standards of sanitation, social distancing, or any other work or customer

safety requirement related to COVID-19, with which Montgomery Downtown proved compliance,

as illustrated in Exhibit W.

       137.    On April 28, 2022, Montgomery Downtown received notification that SBA

required more information to determine the forgiveness of its Second Draw PPP Loan. Despite

Montgomery Downtown providing the requested information, SBA has not forgiven Montgomery

Downtown’s Second Draw PPP Loan to date. SBA has, however, “charged off” the loan as to

Montgomery Downtown’s Lender, as illustrated in Exhibit X, attached hereto.

       138.    Despite the charge off to the Lender, Montgomery Downtown remains liable for

the repayment of its Second Draw PPP Loan and interest, because SBA has not provided any

correspondence to Montgomery Downtown that its Second Draw PPP Loan is forgiven.




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         139.       On January 24, 2022, Montgomery Downtown received a CID from Defendant

DOJ requesting responses to Interrogatories and production of documents related to its application

for PPP loans and loan forgiveness.

         140.       As of July 10, 2024, despite having provided SBA all the requested documents

regarding its Second Draw PPP Loan Forgiveness Application, Montgomery Downtown has not

received a final determination regarding its Second Draw PPP Loan Forgiveness Application,

presumably due to DOJ’s investigation. As such, an actual case and controversy exists.

VI.      Montgomery Hospitality

         141.       Montgomery Hospitality repeats and incorporates by reference each and every

allegation contained in the preceding paragraphs as if fully set forth herein.

      A. First Draw PPP Loan Application

         142.       On or before April 3, 2020, Montgomery Hospitality applied for a First Draw PPP

Loan through Citizens National Bank of Meridian (“Lender”). A copy of Montgomery

Hospitality’s First Draw PPP Loan Application is attached hereto as Exhibit Y.

         143.       As part of its First Draw PPP Loan Application, Montgomery Hospitality certified,

inter alia, that:

                    a.     it was eligible to receive a loan under the rules in effect at the time the

application was submitted, with which Montgomery Hospitality can prove compliance,

specifically, that it was engaged in a business with a NAICS code that begins with 72, had more

than one physical location, and had less than 500 employees per location as detailed in Exhibit Y.

                    b.     all SBA loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

                    c.     funds would be used to retain workers and maintain payroll or make

mortgage interest payments, lease payments, and utility payments, as specified under the PPP



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Rules.

                d.      it would provide to the Lender documentation verifying the number of full-

time equivalent employees on the Applicant’s payroll as well as the dollar amounts of payroll

costs, covered mortgage interest payments, covered rent payments, and covered utilities for the

covered period following the loan, with which Montgomery Hospitality proved compliance, as

illustrated in Exhibit Y.

                e.      the information provided in the application and the information provided in all

supporting documents and forms was true and accurate in all material respects.

         144.   On April 11, 2020, the Lender approved Montgomery Hospitality’s application.

         145.   On April 20, 2020, loan proceeds were disbursed to Montgomery Hospitality and

deposited into Montgomery Hospitality’s bank account ending in X-92857.

         146.   Montgomery Hospitality complied with all certifications in its First Draw PPP Loan

Application.

    B.          First Draw PPP Loan Forgiveness Application

         147.   On November 20, 2020, Montgomery Hospitality submitted a forgiveness

application for its First Draw PPP Loan (Form 3508EZ).

         148.   As part of its First Draw PPP Loan Forgiveness Application, Montgomery

Hospitality certified, inter alia, that:

                a.      the dollar amount for which forgiveness was requested was used to pay

costs that are eligible for forgiveness (payroll costs to retain employees; business mortgage interest

payments; business rent or lease payments; or business utility payments), with which Montgomery

Hospitality proved compliance, as illustrated in Exhibit Z, attached hereto;

                b.      the dollar amount for which forgiveness was requested included payroll

costs equal to at least 60% of the forgiveness amount, with which Montgomery Hospitality proved



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compliance, as illustrated in Exhibit Z;

               c.      the dollar amount for which forgiveness was requested, for a 24-week

Covered Period, did not exceed 2.5 months’ worth of 2019 compensation for any owner-employee

or self-employed individual/general partner, capped at $20,833 per individual, with which

Montgomery Hospitality proved compliance, as illustrated in Exhibit Z;

               d.      the Borrower did not reduce salaries or hourly wages by more than 25

percent for any employee during the Covered Period (8 weeks) or Alternative Payroll Covered

Period (24 weeks) compared to the period between January 1, 2020 and March 31, 2020, with

which Montgomery Hospitality proved compliance, as illustrated in Exhibit Z;

               e.      the information provided in the application and the information provided in

all supporting documents and forms was true and correct in all material respects and that the

applicant understood that knowingly making a false statement to obtain forgiveness of an SBA-

guaranteed loan is punishable under the law, with which Montgomery Hospitality proved

compliance, as illustrated in Exhibit Z;

               f.      it did not reduce the number of employees or the average paid hours of

employees between January 1, 2020 and the end of the Covered Period, with which Montgomery

Hospitality proved compliance, as illustrated in Exhibit Z;

               g.      it was unable to operate between February 15, 2020, and the end of the

Covered Period at the same level of business activity as before February 15, 2020 due to

compliance with requirements established or guidance issued between March 1, 2020 and

December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers

for Disease Control and Prevention, or the Occupational Safety and Health Administration, related

to the maintenance of standards of sanitation, social distancing, or any other work or customer

safety requirement related to COVID-19, with which Montgomery Hospitality proved compliance,



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as illustrated in Exhibit Z.

        149.     On November 27, 2020, Montgomery Hospitality received notification that its First

Draw PPP Loan had been forgiven.

    C. Second Draw PPP Loan Application

        150.     On January 12, 2021, Montgomery Hospitality applied for a Second Draw PPP

Loan through Citizens National Bank of Meridian (“Lender”). A copy of Montgomery

Hospitality’s Second Draw PPP Loan Application is attached hereto as Exhibit AA.

        151.     As part of its Second Draw PPP Loan Application, Montgomery Hospitality

certified, inter alia, that:

                 a.      it was eligible to receive a loan under the rules in effect at the time the

application was submitted, which Montgomery Hospitality submitted, proving its eligibility,

specifically, that it was engaged in a business with a NAICS code that begins with 72, had more

than one physical location, and had less than 500 employees per location as detailed in Exhibit

AA.

                 b.      all loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

                 c.      it had realized a reduction in gross receipts in excess of 25% relative to the

relevant comparison time period, with which Montgomery Hospitality proved compliance, as

illustrated in Exhibit AA.

                 d.      the funds would be used to retain workers and maintain payroll; or make

payments for mortgage interest, rent, utilities, covered operations expenditures, covered property

damage costs, covered supplier costs, and covered worker protection expenditures as specified

under the Paycheck Protection Program Rules.




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                e.      the information provided in the application and the information provided in

all supporting documents and forms was true and accurate in all material respects.

        152.    On January 22, 2021, the Lender approved Montgomery Hospitality’s application.

        153.    On February 3, 2021, loan proceeds were disbursed to Montgomery Hospitality and

deposited into Montgomery Hospitality’s bank account ending in X-92857.

        154.    Montgomery Hospitality complied with all certifications in its Second Draw PPP

Loan Application.

    D. Second Draw PPP Loan Forgiveness Application

        155.    On July 21, 2021, Montgomery Hospitality submitted a forgiveness application for

its Second Draw PPP Loan (Form 3508S).

        125.    As part of its Second Draw PPP Loan Forgiveness Application, Montgomery

Hospitality certified, inter alia, that:

                a.      That the Borrower complied with all requirements in the PPP Rules,

including the rules related to:

                                 eligible uses of PPP loan proceeds, with which Montgomery

Hospitality proved compliance, as illustrated in Exhibit BB, attached hereto;

                                 the amount of PPP loan proceeds that must be used for payroll costs,

with which Montgomery Hospitality proved compliance, as illustrated in Exhibit BB;

                                 the calculation and documentation of the Borrower’s revenue

reduction (if applicable), with which Montgomery Hospitality proved compliance, as illustrated in

Exhibit BB; and

                                 the calculation of the Borrower’s Requested Loan Forgiveness

Amount, with which Montgomery Hospitality proved compliance, as illustrated in Exhibit BB.




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               b.      That the information provided in this application was true and correct in all

material respects and that applicant understood that knowingly making a false statement to obtain

forgiveness of an SBA-guaranteed loan is punishable under the law, with which Montgomery

Hospitality proved compliance, as illustrated in Exhibit BB.

        156.   On July 27, 2021, Montgomery Hospitality received notification that its Second

Draw PPP Loan had been forgiven.

        157.   Despite SBA forgiving Montgomery Hospitality’s First and Second Draw PPP

 loans, Mongomery Hospitality received a CID from Defendant DOJ requesting responses to

 Interrogatories and production of documents related to its application for PPP loans and loan

 forgiveness. As such, Montgomery Hospitality is under active investigation from DOJ, and an

 actual case and controversy exists.

VII.    P&T Hospitality

        158.   P&T Hospitality repeats and incorporates by reference each and every allegation

contained in the preceding paragraphs as if fully set forth herein.

    A. First Draw PPP Loan Application

        159.   On or before April 3, 2020, P&T Hospitality applied for a First Draw PPP Loan

through Citizens National Bank of Meridian (“Lender”). A copy of P&T Hospitality’s First Draw

PPP Loan Application is attached hereto as Exhibit CC.

        160.   As part of its First Draw PPP Loan Application, P&T Hospitality certified, inter

alia, that:

               a.      it was eligible to receive a loan under the rules in effect at the time the

application was submitted, with which P&T Hospitality can prove compliance, specifically, that it

was engaged in a business with a NAICS code that begins with 72, had more than one physical

location, and had less than 500 employees per location as detailed in Exhibit CC.



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                 b.      all SBA loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

                 c.      funds would be used to retain workers and maintain payroll or make

mortgage interest payments, lease payments, and utility payments, as specified under the PPP

Rules.

                 d.      it would provide to the Lender documentation verifying the number of full-

time equivalent employees on the Applicant’s payroll as well as the dollar amounts of payroll

costs, covered mortgage interest payments, covered rent payments, and covered utilities for the

covered period following the loan, with which P&T Hospitality proved compliance, as illustrated

in Exhibit CC.

                 e.      the information provided in the application and the information provided in all

supporting documents and forms was true and accurate in all material respects.

         161.    On April 14, 2020, the Lender approved P&T Hospitality’s application.

         162.    On April 20, 2020, loan proceeds were disbursed to P&T Hospitality and deposited

into P&T Hospitality’s bank account ending in X-34808.

         163.    P&T Hospitality complied with all certifications in its First Draw PPP Loan

Application.

    B. First Draw PPP Loan Forgiveness Application

         164.    On November 20, 2020, P&T Hospitality submitted a forgiveness application for

its First Draw PPP Loan (Form 3508EZ).

         165.    As part of its First Draw PPP Loan Forgiveness application, P&T Hospitality

certified, inter alia, that:

                 a.      the dollar amount for which forgiveness was requested was used to pay

costs that are eligible for forgiveness (payroll costs to retain employees; business mortgage interest



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payments; business rent or lease payments; or business utility payments), with which P&T

Hospitality proved compliance, as illustrated in Exhibit DD, attached hereto;

               b.     the dollar amount for which forgiveness was requested included payroll

costs equal to at least 60% of the forgiveness amount, with which P&T Hospitality proved

compliance, as illustrated in Exhibit DD;

               c.     the dollar amount for which forgiveness was requested, for a 24-week

Covered Period, did not exceed 2.5 months’ worth of 2019 compensation for any owner-employee

or self-employed individual/general partner, capped at $20,833 per individual, with which P&T

Hospitality proved compliance, as illustrated in Exhibit DD;

               d.     the Borrower did not reduce salaries or hourly wages by more than 25

percent for any employee during the Covered Period (8 weeks) or Alternative Payroll Covered

Period (24 weeks) compared to the period between January 1, 2020 and March 31, 2020, with

which P&T Hospitality proved compliance, as illustrated in Exhibit DD;

               e.     the information provided in the application and the information provided in

all supporting documents and forms was true and correct in all material respects and that the

applicant understood that knowingly making a false statement to obtain forgiveness of an SBA-

guaranteed loan is punishable under the law, with which P&T Hospitality proved compliance, as

illustrated in Exhibit DD;

               f.     it did not reduce the number of employees or the average paid hours of

employees between January 1, 2020 and the end of the Covered Period, with which P&T

Hospitality proved compliance, as illustrated in Exhibit DD;

               g.     it was unable to operate between February 15, 2020, and the end of the

Covered Period at the same level of business activity as before February 15, 2020 due to

compliance with requirements established or guidance issued between March 1, 2020 and



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December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers

for Disease Control and Prevention, or the Occupational Safety and Health Administration, related

to the maintenance of standards of sanitation, social distancing, or any other work or customer

safety requirement related to COVID-19, with which P&T Hospitality proved compliance, as

illustrated in Exhibit DD.

        166.   On December 8, 2020, P&T Hospitality received notification that its First Draw

PPP Loan had been forgiven.

    C. Second Draw PPP Loan Application

        167.   On January 12, 2021, P&T Hospitality applied for a Second Draw PPP Loan

through Citizens National Bank of Meridian (“Lender”). A copy of P& T Hospitality’s Second

Draw PPP Loan Application is attached hereto as Exhibit EE.

        168.   As part of its Second Draw PPP Loan Application, P&T Hospitality certified, inter

alia, that:

               a.      it was eligible to receive a loan under the rules in effect at the time the

application was submitted, which P&T Hospitality submitted, proving its eligibility, specifically,

was engaged in a business with a NAICS code that begins with 72, had more than one physical

location, and had less than 500 employees per location as detailed in Exhibit EE.

               b.      all loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

               c.      it had realized a reduction in gross receipts in excess of 25% relative to the

relevant comparison time period, with which P&T Hospitality proved compliance, as illustrated in

Exhibit EE.

               d.      the funds would be used to retain workers and maintain payroll; or make

payments for mortgage interest, rent, utilities, covered operations expenditures, covered property



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damage costs, covered supplier costs, and covered worker protection expenditures as specified

under the Paycheck Protection Program Rules.

                 e.        the information provided in the application and the information provided in

all supporting documents and forms was true and accurate in all material respects.

        169.     On January 22, 2021, the Lender approved P&T Hospitality’s application.

        170.     On February 1, 2021, loan proceeds were disbursed to P&T Hospitality and

deposited into P&T Hospitality’s bank account ending in X-34808.

        171.     P&T Hospitality complied with all certifications in its Second Draw PPP Loan

Application.

    D. Second Draw PPP Loan Forgiveness Application

        172.     On August 5, 2021, P&T Hospitality submitted a forgiveness application for its

Second Draw PPP Loan (Form 3508EZ).

        173.     As part of its Second Draw PPP Loan Forgiveness Application, P&T Hospitality

certified, inter alia, that:

                 a.        the dollar amount for which forgiveness was requested:

                       (i) was used to pay business costs that were eligible for forgiveness, with which

 P&T Hospitality proved compliance, as illustrated in Exhibit FF, attached hereto;

                      (ii) included payroll costs equal to at least 60% of the forgiveness amount, with

which P&T Hospitality proved compliance, as illustrated in Exhibit FF;

                      (iii) did not exceed 2.5 months’ worth of 2019 compensation for any owner-

employee or self-employed individual/general partner, capped at $20,833 per individual in total

across all businesses, during the year used to calculate the PPP loan amount, with which P&T

Hospitality proved compliance, as illustrated in Exhibit FF;




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                 b.    the Borrower did not reduce salaries or hourly wages of any employee by

more than 25 percent for any employee during the Covered Period compared to the most recent

quarter before the Covered Period, with which P&T Hospitality proved compliance, as illustrated

in Exhibit FF;

                 c.    the Borrower submitted to the Lender the required documentation verifying

payroll costs, the existence of obligations and service (as applicable) prior to February 15, 2020,

and eligible business mortgage interest payments, business rent or lease payments, business utility

payments, covered operations expenditures, covered property damage costs, covered supplier

costs, and covered worker protection expenditures, with which P&T Hospitality proved

compliance, as illustrated in Exhibit FF;

                 d.    the information provided in the application and the information provided in

all supporting documents and forms was true and correct in all material respects;

                 e.    the Borrower did not reduce the number of employees or the average paid

hours of employees between January 1, 2020 and the end of the Covered Period, with which P&T

Hospitality proved compliance, as illustrated in Exhibit FF; and

                 f.    the Borrower was unable to operate between February 15, 2020, and the end

of the Covered Period at the same level of business activity as before February 15, 2020 due to

compliance with requirements established or guidance issued between March 1, 2020 and

December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers

for Disease Control and Prevention, or the Occupational Safety and Health Administration, related

to the maintenance of standards of sanitation, social distancing, or any other work or customer

safety requirement related to COVID-19, with which P&T Hospitality proved compliance, as

illustrated in Exhibit FF.




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           174.   On August 12, 2021, P&T Hospitality received notification that its Second Draw

PPP Loan had been forgiven.

           175.   Despite SBA forgiving P&T Hospitality’s First and Second Draw PPP Loans, P&T

 Hospitality received a CID from Defendant DOJ requesting responses to Interrogatories and

 production of documents related to its application for PPP loans and loan forgiveness. As such,

 P&T Hospitality is under active investigation from DOJ, and an actual case and controversy

 exists.

VIII. Vision Hospitality

           176.   Vision Hospitality repeats and incorporates by reference each and every allegation

contained in the preceding paragraphs as if fully set forth herein.

    A. First Draw PPP Loan Application

           177.   On or before April 3, 2020, Vision Hospitality applied for a First Draw PPP Loan

through Citizens National Bank of Meridian (“Lender”). A copy of Vision Hospitality’s First Draw

PPP Loan Application is attached hereto as Exhibit GG.

           178.   As part of its First Draw PPP Loan Application, Vision Hospitality certified, inter

alia, that:

                  a.     it was eligible to receive a loan under the rules in effect at the time the

application was submitted, with which Vision Hospitality can prove compliance, specifically, that

it was engaged in a business with a NAICS code that begins with 72, had more than one physical

location, and had less than 500 employees per location as detailed in Exhibit GG.

                  b.     all SBA loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

                  c.     funds would be used to retain workers and maintain payroll or make

mortgage interest payments, lease payments, and utility payments, as specified under the PPP



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Rules.

                 d.      it would provide to the Lender documentation verifying the number of full-

time equivalent employees on the Applicant’s payroll as well as the dollar amounts of payroll

costs, covered mortgage interest payments, covered rent payments, and covered utilities for the

covered period following the loan, with which Vision Hospitality proved compliance, as illustrated

in Exhibit GG.

                 e.      the information provided in the application and the information provided in all

supporting documents and forms was true and accurate in all material respects.

         179.    On April 14, 2020, the Lender approved Vision Hospitality’s application.

         180.    On April 20, 2020, loan proceeds were disbursed to Vision Hospitality and

deposited into Vision Hospitality’s bank account ending in X-93117.

         181.    Vision Hospitality complied with all certifications in its First Draw PPP Loan

Application.

    B. First Draw PPP Loan Forgiveness Application

         182.    On November 20, 2020, Vision Hospitality submitted a forgiveness application for

its First Draw PPP Loan (Form 3508EZ).

         183.    As part of its First Draw PPP Loan Forgiveness application, Vision Hospitality

certified, inter alia, that:

                 a.      the dollar amount for which forgiveness was requested was used to pay

costs that are eligible for forgiveness (payroll costs to retain employees; business mortgage interest

payments; business rent or lease payments; or business utility payments), with which Vision

Hospitality proved compliance, as illustrated in Exhibit HH, attached hereto;

                 b.      the dollar amount for which forgiveness was requested included payroll

costs equal to at least 60% of the forgiveness amount, with which Vision Hospitality proved



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compliance, as illustrated in Exhibit HH;

               c.     the dollar amount for which forgiveness was requested, for a 24-week

Covered Period, did not exceed 2.5 months’ worth of 2019 compensation for any owner-employee

or self-employed individual/general partner, capped at $20,833 per individual, with which Vision

Hospitality proved compliance, as illustrated in Exhibit HH;

               d.     the Borrower did not reduce salaries or hourly wages by more than 25

percent for any employee during the Covered Period (8 weeks) or Alternative Payroll Covered

Period (24 weeks) compared to the period between January 1, 2020 and March 31, 2020, with

which Vision Hospitality proved compliance, as illustrated in Exhibit HH;

               e.     the information provided in the application and the information provided in

all supporting documents and forms was true and correct in all material respects and that the

applicant understood that knowingly making a false statement to obtain forgiveness of an SBA-

guaranteed loan is punishable under the law, with which Vision Hospitality proved compliance, as

illustrated in Exhibit HH;

               f.     it did not reduce the number of employees or the average paid hours of

employees between January 1, 2020 and the end of the Covered Period, with which Vision

Hospitality proved compliance, as illustrated in Exhibit HH;

               g.     it was unable to operate between February 15, 2020, and the end of the

Covered Period at the same level of business activity as before February 15, 2020 due to

compliance with requirements established or guidance issued between March 1, 2020 and

December 31, 2020, by the Secretary of Health and Human Services, the Director of the Centers

for Disease Control and Prevention, or the Occupational Safety and Health Administration, related

to the maintenance of standards of sanitation, social distancing, or any other work or customer

safety requirement related to COVID-19, with which Vision Hospitality proved compliance, as



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illustrated in Exhibit HH.

        184.        On December 8, 2020, Vision Hospitality received notification that its First Draw

PPP Loan had been forgiven.

    C. Second Draw PPP Loan Application

        185.        On January 12, 2021, Vision Hospitality applied for a Second Draw PPP Loan

through Citizens National Bank of Meridian (“Lender”). A copy of Vision Hospitality’s Second

Draw PPP Loan Application is attached hereto as Exhibit II.

        186.        As part of its Second Draw PPP Loan Application, Vision Hospitality certified,

inter alia, that:

                    a.     it was eligible to receive a loan under the rules in effect at the time the

application was submitted, which Vision Hospitality submitted, proving its eligibility, specifically,

was engaged in a business with a NAICS code that begins with 72, had more than one physical

location, and had less than 500 employees per location as detailed in Exhibit II.

                    b.     all loan proceeds would be used only for business-related purposes as

specified in the loan application and consistent with the PPP Rules.

                    c.     it had realized a reduction in gross receipts in excess of 25% relative to the

relevant comparison time period, with which Vision Hospitality proved compliance, as illustrated

in Exhibit II.

                    d.     the funds would be used to retain workers and maintain payroll; or make

payments for mortgage interest, rent, utilities, covered operations expenditures, covered property

damage costs, covered supplier costs, and covered worker protection expenditures as specified

under the Paycheck Protection Program Rules.

                    e.     the information provided in the application and the information provided in

all supporting documents and forms was true and accurate in all material respects.



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        187.      On January 23, 2021, the Lender approved Vision Hospitality’s application.

        188.      On February 1, 2021, loan proceeds were disbursed to Vision Hospitality and

deposited into Vision Hospitality’s bank account ending in X-93117.

        189.      Vision Hospitality complied with all certifications in its Second Draw PPP Loan

Application.

    D. Second Draw PPP Loan Forgiveness Application

        190.      On July 21, 2021, Vision Hospitality submitted a forgiveness application for its

Second Draw PPP Loan (Form 3508S).

        126.      As part of its Second Draw PPP Loan Forgiveness Application, Vision Hospitality

certified, inter alia, that:

                  a.     That the Borrower complied with all requirements in the PPP Rules,

including the rules related to:

                                 eligible uses of PPP loan proceeds, with which Vision Hospitality

proved compliance, as illustrated in Exhibit JJ, attached hereto;

                                 the amount of PPP loan proceeds that must be used for payroll costs,

with which Vision Hospitality proved compliance, as illustrated in Exhibit JJ;

                                 the calculation and documentation of the Borrower’s revenue

reduction (if applicable), with which Vision Hospitality proved compliance, as illustrated in

Exhibit JJ; and

                                 the calculation of the Borrower’s Requested Loan Forgiveness

Amount, with which Vision Hospitality proved compliance, as illustrated in Exhibit JJ.

                  b.     That the information provided in this application was true and correct in all

material respects and that applicant understood that knowingly making a false statement to obtain

forgiveness of an SBA-guaranteed loan is punishable under the law, with which Vision Hospitality



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proved compliance, as illustrated in Exhibit JJ.

       191.    On July 27, 2021, Vision Hospitality received notification that its Second Draw

PPP Loan had been forgiven.

       192.    Despite SBA forgiving Vision Hospitality’s First and Second Draw PPP Loans,

 Vision Hospitality received a CID from Defendant DOJ requesting responses to Interrogatories

 and production of documents related to its application for PPP loans and loan forgiveness. As

 such, Vision Hospitality is under active investigation from DOJ, and an actual case and

 controversy exists.

                                     CLAIMS FOR RELIEF

                    DECLARATORY JUDGMENT ACT, 28 U.S.C. § 2201

       193.    Plaintiffs repeat and incorporate by reference each and every allegation contained

in the preceding paragraphs as if fully set forth herein.

       194.    Plaintiffs face the risk of a civil enforcement action under the FCA.

       195.    Defendants’ interpretation of the FCA and its regulations is inconsistent with the

statutory and regulatory text and purports to obligate Plaintiffs to follow requirements that are

unsupported by the relevant statute and regulations.

       196.    Accordingly, an actual or substantial controversy exists between Plaintiffs and

Defendants as to their respective legal rights and duties.

       197.    This dispute is ripe. As set forth above, on information and belief, Defendants

intend to file a civil enforcement action based on alleged violations of the False Claims Act, and

Plaintiffs dispute the factual and legal basis for such action.

       198.    A declaration would clarify and settle the parties’ legal obligations under the text

of the FCA and its implementing regulations.

       199.     Plaintiffs are thus entitled to declaratory relief as set forth below.



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                           WRIT OF MANDAMUS AS TO THE
                  SECOND DRAW PPP LOAN FORGIVENESS APPLICATIONS
                       FOR DOTHAN HOSPITALITY, HOPE HULL,
                     MONTGOMERY DOWNTOWN, AND ENTERPRISE
                             (28 U.S.C. §§ 1361 and 1651(a))

        127.   Dothan Hospitality, Hope Hull, Montgomery Downtown, and Enterprise Hotels

repeat and incorporate by reference each and every allegation contained in the preceding

paragraphs as if fully set forth herein.

        128.   In relevant part, the All Writs Act provides that “[t]he Supreme Court and all courts

established by Act of Congress may issue all writes necessary or appropriate in aid of their

respective jurisdictions and agreeable to the usages and principles of law.” 28 U.S.C. § 1651(a).

        129.   District Courts may grant mandamus relief by “compel[ling] an officer or employee

of the United States of any agency thereof to perform a duty owed to the plaintiff.” 28 U.S.C. §

1361.

        130.   A mandamus is warranted when an agency’s delay in rendering a decision is

egregious. In re Nat. Res. Def. Council, Inc., 956 F.3d 1134, 1138 (9th Cir. 2020). “Repeatedly

courts in this and other circuits have concluded that “a reasonable time for agency action is

typically counted in weeks or months, not years.” In re Nat. Res. Def. Council, Inc., 956 F.3d 1134,

1139 (9th Cir. 2020) (internal quotations omitted.); see In re Core Commc'ns, 531 F.3d 849, 857

(D.C. Cir. 2008) (finding six-year delay unreasonable); In re Bluewater Network, 234 F.3d 1305,

1316 (D.C. Cir. 2000) (finding nine-year delay unreasonable); In re Int'l Chem. Workers Union,

958 F.2d 1144, 1150 (D.C. Cir. 1992) (per curiam) (finding six year delay unreasonable).

        131.   As outlined above, Dothan Hospitality, Hope Hull, Montgomery Downtown, and

Enterprise Hotels submitted their Second Draw PPP Loan Forgiveness Application and

accompanying documents to SBA on August 2, 2021 (Montgomery Downtown) and July 19, 2021



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(Dothan Hospitality, Hope Hull, and Enterprise Hotels). As of July 10, 2024, almost three years

after receiving Dothan Hospitality’s, Hope Hull’s, Montgomery Downtown’s, and Enterprise

Hotels’ loan forgiveness applications, SBA has not provided Dothan Hospitality, Hope Hull,

Montgomery Downtown, and Enterprise Hotels with notification that their Second Draw PPP

Loans have been forgiven.

       132.     A mandamus compelling SBA forgive to the Second Draw PPP Loans of Dothan

Hospitality, Hope Hull, Montgomery Downtown, and Enterprise Hotels is warranted given the

egregious and unreasonable delay.

                                      PRAYER FOR RELIEF

   For the reasons above, Plaintiff respectfully requests that the Court:

   1. Declare that:

             a. Plaintiffs were eligible to apply for a PPP loan;

             b. Plaintiffs were eligible to receive a PPP loan;

             c. Plaintiffs’ commingling of PPP loan proceeds with current monies in existing bank

                accounts was not prohibited by and did not violate the U.S. Code or SBA

                regulations;

             d. Plaintiffs used the PPP loan proceeds appropriately for eligible expenses;

             e. Plaintiffs’ use of its own funds, which were commingled with but in excess of PPP

                loan proceeds, for non-PPP purposes did not violate the U.S. Code or SBA

                regulations, and

             f. Plaintiffs did not falsely certify their PPP loan forgiveness application.

   2. Enter an order compelling Defendants SBA and Administrator Isabella Casillas Guzman

       to:




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         a. Immediately forgive the Second Draw PPP Loans of Dothan Hospitality, Hope

             Hull, Montgomery Downtown, and Enterprise Hotels; and

         b. Implement a full, speedy, and adequate administrative review process if Defendants

             intend to deny forgiveness of the Second Draw PPP Loans of Dothan Hospitality,

             Hope Hull, Montgomery Downtown, and Enterprise Hotels.

  3. Award costs and attorneys’ fees to Plaintiff; and

  4. Grant such other relief as may be just and proper.

      THIS the 12th day of July, 2024.


                                               Respectfully submitted,

                                               /s/ J. Breanne Zarzour
                                               J. BREANNE ZARZOUR
                                               Attorneys for Plaintiffs




OF COUNSEL:
PHELPS DUNBAR LLP
101 Dauphin Street, Suite 1000
Mobile, Alabama 36602
Post Office Box 2727
Mobile, Alabama 36652
251 432 4481
Brie.Zarzour@phelps.com




                   DEFENDANTS TO BE SERVED BY PLAINTIFFS




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