A major bank is attempting to force an Orlando, Fla., company that filed for chapter 11 bankruptcy into paying its Paycheck Protection Program loan in full immediately — despite the company's belief that most of the loan will be forgiven, the Orlando Business Journal reported. Birmingham, Ala.-based Regions Bank said that a $9.3 million PPP loan is to be paid back in full by Winter Park, Fla.-based 1069 Restaurant Group LLC, which controls entities related to roughly 33 Golden Corrals in Florida and Georgia. That's because Regions Bank included a so-called cross-default provision in its PPP loan agreement with 1069 Restaurant Group — meaning that if a borrower defaults on a separate loan with a bank, then the bank can claim that the borrower is in default on the PPP loan, making the loan due immediately. In this case, 1069 Restaurant Group defaulted on its payments for a $49.7 million mortgage, according to court documents, which triggered Regions Bank to say that 1069 Restaurant Group was in default on the restaurant group's PPP loan. 1069 Restaurant Group then voluntarily filed on Oct. 5 for chapter 11 bankruptcy protection. The consequences of how this issue plays out may have implications for thousands of struggling small businesses in Central Florida and nationwide that got help from the $669 billion federal business loan program established during the pandemic.
