Adams and Reese Partner Chris Kane was interviewed in an ABA Journal article discussing the many challenges, complexities, changing rules, and in some cases, fraud and abuse, of the Paycheck Protection Program – Small Business Administration-backed loans meant to keep businesses afloat following the early period of the COVID-19 pandemic.
The $800 billion loan program, part of the 2020 coronavirus stimulus package known as the CARES Act, was distributed in April 2020, followed by another draw in March 2021.
Kane estimated that Adams and Reese assisted approximately 300 clients to determine if they were eligible for the program. “The rules changed literally on a daily basis, and we couldn’t make any guarantees,” says Kane, adding that they focused on the regulation in place the day a client’s application was led. A key instruction throughout the process was making sure payroll data matched what was put in the loan application. “We would not go back and verify that, but we said to clients, ‘Make sure you can and do.’”
For legal advice on applications seeking more than $1 million, he estimates the firm usually charged between $5,000 and $7,000. As of October, some client loans had SBA review after they had been forgiven, but no audits. And some received questions Kane thinks are pre-audit-related.
He’s hopeful the government will vigorously pursue all fraud in PPP loans, but he acknowledges that may not be realistic. “Like with any company or agency, at the end of the day, it’s a resource deployment. I think the federal government is going to take a look at what’s the risk and what’s the return,” Kane says.
Resident in the Adams and Reese New Orleans office, Kane maintains a multifaceted practice, counseling clients on economic development, transportation law, construction law, regulatory and government relations, disaster recovery, and highly specific litigation matters. Kane serves as the Adams and Reese Global Trade, Transportation and Logistics Practice Team Leader.