There are at least three areas of the CARES Act totaling in excess of $376.5 billion for small businesses that come into play in a chapter 11 proceeding—the $10.562 billion Emergency Economic Injury Disaster Loan and Grants (EIDL) Program, the $349 billion Paycheck Protection Program (PPP) provisions, and the $17 billion in Subsidies for Certain Other Small Business Loan Payments. There is no express prohibition in CARES that precludes the application of these small business provisions in a chapter 11 bankruptcy proceeding. This is a significantly huge application of the CARES Act when it comes to DIP financing, all detailed by Thomas J. Salerno, Gerald Weidner, Christopher Simpson and Susan Ebner from Stinson LLP in this ABI exclusive.
Part II of this Series is also available.
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