New York hospital files lawsuit over $10M loan forgiveness decision

Syracuse, N.Y.-based Crouse Hospital is seeking to overturn the federal government's decision not to forgive a $10 million paycheck protection loan it received in early 2020 to pay employees during the COVID-19 pandemic, reported May 30.

The hospital said in a lawsuit it does not have the money to repay the loan and said it would be "catastrophic" for its finances if it was forced to pay back the loan. 

The Paycheck Protection Program was launched at the beginning of the pandemic to prevent layoffs. Loans made through the program did not have to be paid back if the funds were used to cover payroll, but the Small Business Administration, which backed the loans, said that Crouse was never eligible for the loan in the first place. 

Crouse appealed the SBA's decision twice, according to the report, and is now asking a federal court to overturn the agency's decision. 

In April, the hospital said it would not seek another partner after a failed merger with Syracuse, N.Y.-based SUNY Upstate University Hospital.


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