Several publicly traded companies say they are not planning to return loans received from a small-business rescue program, despite pressure from the Trump administration to repay the funds.

Companies in the hotel, cruise ship and medical device sectors said they are qualified to receive the money under the Paycheck Protection Program and need the funds to stay in business.

Their resistance comes days after the Small Business Administration suggested dozens of publicly held companies should give back money received from the Paycheck Protection Program by May 7.

The agency said public companies with “substantial market value” and the ability to raise money through capital markets were not the intended recipients of the funds, which were meant to help small businesses keep employees battered by the novel coronavirus pandemic.

Treasury Secretary Steven Mnuchin increased the pressure Tuesday morning, saying the government plans to audit all loans over $2 million before it forgives them. The rules call for the government to forgive the loans if companies use them to keep employees on the payroll.

“Anybody that took the money that shouldn’t have taken the money, one, it won’t be forgiven and two, they may be subject to criminal liability, which is a big deal,” Mnuchin said in an interview on Fox Business. “I encourage everybody to look at this and pay back these loans now so we can recycle the money if you made a mistake.”


Some public companies, including Shake Shack, Kura Sushi USA and Ruth’s Chris Steak House quickly announced plans to return the money.

Several other lesser-known public companies contacted by The Washington Post, including CalAmp, a tech firm in Irvine, California, and Graham, a manufacturer in Batavia, New York, also said they would return the funds. Dozens of firms did not respond to requests for comment.

But other companies are resisting returning the money. Lindblad Expeditions Holdings, which operates high-end cruises, said it met the criteria for applicants and plans to keep its $6.6 million loan.

The company reported having about $137 million in cash as of March 31, shortly after drawing down on a $45 million line of credit. The coronavirus prompted the company to cancel its cruises on March 12, a move it called “financially devastating.”

“Despite this circumstance, Lindblad is the very rare travel company that has not imposed any layoffs, furloughs or salary reductions to date – because of our access to the PPP,” said the company, which employs 461 people in the United States.

Lindblad, which has a market value of $276 million, was taken public five years ago in a deal orchestrated by Mark Ein, a District of Columbia-based executive who owns the Washington Kastles women’s tennis franchises and Washington City Paper. The New York-based company is best known as the operator of National Geographic-branded exotic cruises that take tourists to locales such as the Galápagos Islands and Antarctica.


A group of hotel companies chaired by Monty Bennett, a Dallas executive and Republican donor, said it also planned to keep the funds.

Ashford Hospitality Trust, Braemar Hotels & Resorts and Ashford were among the biggest recipients of the loans, receiving them through multiple applications, according to federal filings. The companies said they applied for $126 million total.

In a statement, the companies said they have closed 32 of their 130 hotels and laid off or furloughed more than 90% of their workforce in recent weeks as the travel business has evaporated. “Our singular focus is to get back to the business of hosting guests at our hotels and helping the nearly 14,000 employees who work at our 130 hotels and related businesses return to work as the economy emerges from this terrible crisis,” the companies said.

“We believe it is just as important to bring employees back to work at larger companies like [Ashford] and [Braemar] as it is at smaller companies,” the statement added.

The loan payments to the companies have come under scrutiny, given Bennett’s political donations. Since the 2016 presidential campaign, Bennett has given more than $370,000 to support President Donald Trump and the Republican National Committee, and has given to a slew of other GOP campaigns in the House and Senate, as well as their party committees.

Ashford’s statement said Bennett owns a “significant amount of common stock” in two of the companies, for which he did not receive first-quarter dividends. Bennett also owns “a large portion” of preferred shares in Ashford, for which dividends were halved in the first quarter, the statement said.


One company contacted by The Post, Nortech Systems, appeared to be on the fence, saying it had not yet decided whether it would return the money.

A Maple Grove, Minnesota, maker of medical devices and parts, Nortech said it thought it met all SBA guidelines when applying for a $6.1 million loan, including the strict definition of a small company.

“Without an influx of cash, specifically at this time, we potentially jeopardize people’s jobs at the company and we won’t be able to hire the additional staff needed to work on crucial ventilator parts for a large customer that has contracted to supply ventilators to the U.S. Federal Government,” Nortech said in a statement.

The company, which employs 470 people in the United States, also said its current market value of less than $10 million “severely limits our ability to raise additional capital via the public markets.”

Quantum, a digital storage manufacturer headquartered in San Jose with offices in four other states, also defended its receipt of the money. It noted in a statement that the company’s head count of 550 in the United States is fewer than the 1,250 it said the SBA had set for businesses such as Quantum to qualify for a loan.

“The PPP loan is saving American jobs at Quantum – without it we would most certainly be forced to reduce head count,” the statement said. “We owe it to our employees – who’ve stuck with us through a long and difficult turnaround – to do everything we can to save their jobs during this crisis.”

Quantum has a market valuation of just under $160 million. Its stock closed Monday at $4 a share.

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