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Small Businesses Ask Bank of America to Halt Collections on PPP Loans

May 4, 2023. A trio of California-based small businesses have moved for a preliminary injunction in their deceptive lending lawsuit against Bank of America, seeking an order requiring that the bank halt collecting payments on their Paycheck Protection Program (PPP) loans and stop reporting the payments to credit reporting agencies or collections agencies as the businesses proceed with their proposed class action lawsuit against the bank. The three companies, Happy Puppy LA, Brandamize, and Aurora Environmental Services, filed their lawsuit against Bank of America in February 2023, accusing the bank of misleading them about the requirements for PPP loan forgiveness by the Small Business Administration. In their motion, attorneys for the small businesses explained that their clients could go out of business if forced to repay the PPP loans that they took with the understanding that the loan would be forgiven. The motion before U.S. District Judge Josephine L. Stanton seeks to enjoin the bank from reporting the allegedly past due loans to credit rating agencies, as well as to prevent the bank from collecting payments on the PPP loans.

The small businesses are represented by Hassan Zavareei of Tycko & Zavareei LLP along with co-counsel from the McCune Law Group and Kelley Uustal, PLC.

The case is Happy Puppy LA Inc., et al. v. Bank of America NA, case number 2:23-cv-01354, in the U.S. District Court for the Central District of California.

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