District court sides with SBA in Archdiocese case for pandemic relief


The District Court of Guam — in an order released this morning — has sided with the U.S. Small Business Administration in the case filed by the Archdiocese of Agana over pandemic relief.

The Archdiocese filed a complaint in June 2020 against SBA asking the federal court to rule in their favor so that the Church can avail itself of pandemic federal funding under the Paycheck Protection Program (PPP).

An eligible recipient of the PPP may use the loan to cover payroll and other expenses, in
addition to the existing allowable uses of the loan.

According to documents released by the court, SBA has set criteria that excludes those in bankruptcy from qualifying for the PPP.

The Archdiocese has filed for bankruptcy under Chapter 11.

Accordingly, court documents state that when the Archdiocese attempted to obtain PPP loans in May 2020, the loan application was denied by a bank.

No indication

In a December hearing, the government raised concerns over the possible misuse of federal funds by the Catholic Church if granted eligibility under the SBA’s Paycheck Protection Program or PPP loan forgiveness program.

But Archdiocese of Agana’s bankruptcy attorney Ford Elsaesser says that’s nothing more than a fabrication.

Elsaesser contends that there is no basis for the SBA to discriminate or classify the Catholic Church as ineligible.

He told District Court Chief Judge Frances Tydingco-Gatewood that the idea that somehow the Chapter 11 would subject the PPP to inappropriate utilization is really nothing other than a fabrication.

“There’s absolutely positively no indication that an organizing Chapter 11 debtor would be somehow more prone or more likely to abuse the PPP than any other borrower,” he said.