Statement of Undisputed Facts — Concessions HH v. SBA

Summary

Petitioner's Statement of Undisputed Material Facts in Support of Its Motion for Summary Judgment, filed November 12, 2024 as Document 17-2 in Concessions HH, JV v. The United States Small Business Administration, Civil Action File No. 1:24-CV-1870-WMR, U.S. District Court for the Northern District of Georgia, Atlanta Division. Petitioner states that Concessions HH, JV (CHH) was approved on May 29, 2021 for a second-draw PPP loan of $2,000,000.00 from Citizens Trust Bank, and that the Corporate Group Maximum Rule has a $4 million cap. It states that on November 21, 2022 the SBA denied forgiveness, determining that CHH was ineligible for the PPP loan. The statement cites record documents by ECF number and page.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
CONCESSIONS HH, JV,
Civil Action File No.
1:24-CV-1870-WMR
Petitioner,
v.
THE UNITED STATES SMALL
BUSINESS ADMINISTRATION,
Respondent.
PETITIONER’S STATEMENT OF UNDISPUTED
MATERIAL FACTS IN SUPPORT OF ITS MOTION FOR
SUMMARY JUDGMENT
______________________________________________________________________________
Petitioner Concessions HH, JV (“CHH”), by counsel and pursuant to
Rule 56 of the Federal Rules of Civil Procedure and Local Rule 56.1, hereby
submits Petitioner’s Statement of Undisputed Material Facts in Support of its
Motion for Summary Judgment.
1.
CHH is a member of the Hospitality Industry operating food-
service kiosks in the Atlanta Airport. ECF 13-1 at 57–59; ECF 13-3 at 17–27,
350–51.1
1 This Statement of Undisputed Material Facts cites all record documents using
the page number that appears in the header generated by the district court’s
electronic filing system (rather than using the document’s internal pagination).
Case 1:24-cv-01870-WMR     Document 17-2     Filed 11/12/24     Page 1 of 9

2
2.
As a member of the hospitality industry, CHH has an NAICS code
beginning with 72 (722513). ECF 13-3 at 351.
3.
CHH is one of a group of 98 family-owned entities (known as the
“Russell Group”). ECF 13-3 at 350.
4.
The businesses encompassed within the Russell Group collectively
employ over 1,100 individuals. ECF 13-3 at 350.
5.
CHH received a first-draw PPP loan (#2871667107) in the amount
of $1,716,700.00. ECF 13-3 at 351.
6.
The aggregate amount of funds borrowed by the Russell Group for
first-draw PPP loans was $8,597,783.48. ECF 13-3 at 351.
7.
The SBA approved forgiveness for CHH’s first-draw loan. ECF 13-
3 at 351, 357.
8.
Before CHH applied for a second-draw PPP loan, eight other
businesses within the Russell group applied for and received second-draw PPP
loans:
a. H.J. Russell & Company had a loan amount of $2,000,000.00
disbursed on February 8, 2021. ECF 13-3 at 351.
b. Paschal's Restaurants LLC had a loan amount of $298,201.00
disbursed on March 22, 2021. ECF 13-3 at 351.
Case 1:24-cv-01870-WMR     Document 17-2     Filed 11/12/24     Page 2 of 9

3
c. Castleberry Inn Development LLC had a loan amount of
$234,237.00 disbursed on March 29, 2021. ECF 13-3 at 351.
d. Concessions Int l of the USVI, Inc. had a loan amount of
$371,616.00 disbursed on April 20, 2021. ECF 13-3 at 351.
e. Concessions Miami, LLC had a loan amount of $80,000.00
disbursed on April 27, 2021. ECF 13-3 at 351.
f. CI/CP LLC had a loan amount of $94,113.29 disbursed on May
12, 2021. ECF 13-3 at 351.
g. Concessions Int l & Panda LLC had a loan amount of
$189,700.00 disbursed on May 12, 2021. ECF 13-3 at 351.
h. TCI/M2 Concepts JV had a loan amount of $141,706.53
disbursed on May 20, 2021. ECF 13-3 at 351.
9.
Before CHH’s second-draw loan was disbursed, the cumulative
amount of the second-draw PPP loans borrowed by businesses in the Russell
Group was $3,409,573.82 (i.e., $590,426.18 below the Corporate Group
Maximum Rule’s $4 million cap). ECF 13-3 at 351.
10.
Following disbursement, the SBA concluded that H.J. Russell &
Company was ineligible for its second-draw PPP loan of $2,000,000.00 on the
ground that on the ground that H.J. Russell is not a hospitality company, that
it is therefore ineligible for the waiver of affiliation rules, and that when
Case 1:24-cv-01870-WMR     Document 17-2     Filed 11/12/24     Page 3 of 9

4
aggregated with its affiliates exceeds the PPP’s number-of-employees cap.
ECF 13-3 at 351, 354.
11.
On May 29, 2021, CHH was approved for a second-draw PPP loan
from Citizens Trust Bank in the amount of $2,000,000.00. ECF 13-5 at 1.
12.
CHH’s second-draw PPP loan was disbursed on June 1, 2021. ECF
13-3 at 351.
13.
CHH used the funds it received from its second-draw PPP loan for
payroll expenses and rent payments. ECF 13-3 at 374.
14.
Including CHH’s loan, the cumulative amount borrowed by the
Russell Group for second-draw PPP loans was $5,409,573.82. ECF 13-3 at 351.
15.
Without H.J. Russell & Company’s ineligible loan, the cumulative
amount of the Russell Group’s second-draw PPP loans (including CHH’s loan)
would have been $3,409,573.82. ECF 13-3 at 351.
16.
CHH and its lender applied for forgiveness of its entire second-
draw PPP loan on July 19, 2022. ECF 13-5 at 1.
17.
CHH’s lender recommended forgiveness of CHH’s entire
$2,000,000.00 loan. ECF 13-3 at 374.; ECF 13-5 at 1.
18.
On November 21, 2022, the Small Business Administration
(“SBA”) denied CHH’s forgiveness, determining that CHH “was ineligible for
the PPP loan.” ECF 13-5 at 1. The SBA repeated its conclusion that CHH was
Case 1:24-cv-01870-WMR     Document 17-2     Filed 11/12/24     Page 4 of 9

5
“ineligible” for a second-draw loan because it violated the Corporate Group
Maximum Rule throughout its loan-review analysis:
a. ECF 13-3 at 351 (“1 Borrower is ineligible because the
Corporate Group exceeds the $4MM Corporate Group Max
for Second Draw loans.”);
b. ECF 13-3 at 352 (“One (1) Borrower exceeded the Corporate
Group Max at the time of disbursement and is ineligible.”);
c. ECF 13–1 at 17 (“Concessions HH. JV is ineligible for
forgiveness of its loan since it exceeded the 2nd draw
limitation.”);
d. ECF 13–1 at 17 (“SBA has determined that the borrower was
ineligible for the PPP loan.”);
e. ECF 13–1 at 18 (“SBA has determined that the borrower was
ineligible for the PPP loan. … It is verified that this borrower
is not eligible for the Second Draw PPP program due to the
borrower exceeding corporate group max funding of
$4,000,000.”).
19.
The SBA determined that CHH and the other members of the
Russell Group had “common ownership” and “common management . . . among
Donata Russell Major and/or H. Jerome Russell, Jr., and/or Michael Brent
Case 1:24-cv-01870-WMR     Document 17-2     Filed 11/12/24     Page 5 of 9

6
Russell, as disclosed and attested on Borrower’s addendums to Form 3511.”
ECF 13-5 at 1.
20.
The SBA cited and relied upon 13 C.F.R. 121.103 when it
conducted this “common owner” affiliation analysis. ECF 13-5 at 1.
21.
The SBA based its denial on the fact that CHH was “part of a
corporate group [that had] received more than $4,000,000 of 2nd draw PPP
loans in the aggregate.” ECF 13-5 at 1.
22.
The SBA stated that CHH had “exceeded the Corporate Group
Max of $4MM, for Second Draw loans at the time of disbursement.” ECF 13-5
at 2.
23.
The SBA stated that it recommended denial “even though [CHH
had] a NAICS 72 waiver of the affiliation rules.” ECF 13-5 at 2.
24.
The violation of the Corporate Group Maximum Rule was the sole
reason SBA denied CHH’s forgiveness application. ECF 13-5 at 1–2.
25.
The SBA denied CHH’s entire loan based on the violation of the
Corporate Group Maximum Rule. ECF 13–3 at 355 (“Loan #9159789000 is
recommended for denial as it exceeded the $4MM Second Draw Corporate
Group Max Limit on 6/1/2021.”).
26.
On December 21, 2022, CHH appealed SBA’s Final Loan Review
Decision to the SBA’s Office of Hearings and Appeals. ECF 13-4 at 1.
Case 1:24-cv-01870-WMR     Document 17-2     Filed 11/12/24     Page 6 of 9

7
27.
OHA explained that the SBA did not point “at the number of
employees [CHH] had at the time the loan was drawn” as justification for its
decision. ECF 13-8 at 6.
28.
OHA adopted the SBA’s argument that “[CHH] and all the other
businesses it is affiliated with exceed the Corporate Group Maximum amount
of $4,000,000.00 in Second Draw PPP loans.” ECF 13-8 at 6.
29.
OHA concluded that CHH “and its affiliates withdrew
$5,409,573.82 in second draw PPP loans” and amount which exceeded the “the
limit by more than $1,400,000.00.” ECF 13-8 at 6.
30.
OHA stated that “[CHH] failed to establish that the final SBA loan
review was based on clear error.” ECF 13-8 at 6.
31.
On March 20, 2023, OHA affirmed the SBA’s final loan review
decision. ECF 13-8 at 6.
32.
On April 29. 2024, CHH timely filed its petition for judicial review
of OHA’s order denying CHH’s appeal with this Court. ECF 1.

Case 1:24-cv-01870-WMR     Document 17-2     Filed 11/12/24     Page 7 of 9

8
Respectfully submitted, this 12th day of November, 2024.

/s/ Kian J. Hudson

Kian J. Hudson

(pro hac vice)
BARNES & THORNBURG LLP
11 South Meridian Street
Indianapolis, IN 46204
Telephone: (317) 229-3111
Kian.Hudson@btlaw.com

Eric S. Fisher
Georgia Bar No. 250428
BARNES & THORNBURG LLP
3340 Peachtree Road N.E., Suite 2900
Atlanta, GA 30326-1092
(404) 264-4045
EFisher@btlaw.com

Counsel for Petitioner Concessions HH, JV
Case 1:24-cv-01870-WMR     Document 17-2     Filed 11/12/24     Page 8 of 9

CERTIFICATE OF SERVICE
I hereby certify that I have this day filed the within and foregoing
PETITIONER’S STATEMENT OF UNDISPUTED MATERIAL FACTS IN
SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT with the Clerk of
Court by using the CM/ECF System which will automatically send email
notification of filing to all counsel of record.
Dated: November 12, 2024
/s/ Kian J. Hudson
Counsel for Petitioner
Concessions HH, JV
Case 1:24-cv-01870-WMR     Document 17-2     Filed 11/12/24     Page 9 of 9

File and source

File

concessions_hh_jv_sba__docket-69524798__doc-17_att-2__id-426423691__Statement_of_Undisputed_Material_Facts.pdf

Size

207,904 bytes

SHA-256

ea4c621da11277b8d5fb639c5362aaec496b7ff5c9ed08b649260f8fc8a5e8f3

Our copy

concessions_hh_jv_sba__docket-69524798__doc-17_att-2__id-426423691__Statement_of_Undisputed_Material_Facts.pdf

Original

storage.courtlistener.com