Hartshorne files suit after payroll protection application is denied

By Caroline Salls

Pittsburgh, May 8 – Hartshorne Holdings, LLC debtors Hartshorne Mining, LLC and Hartshorne Mining Group, LLC filed a lawsuit Friday that asks the U.S. Bankruptcy Court for the Western District of Kentucky to issue an injunction prohibiting the administrator of the Small Business Association from denying paycheck protection program applications because of bankruptcy filings.

“Plaintiffs are PPP applicants that meet every one of the statute’s eligibility standards,” the complaint said. “But their applications were denied this week because the SBA – the agency charged with administering the PPP – invented a new eligibility requirement: an applicant may not be a debtor in bankruptcy.”

Hartshorne said this rule “is contrary to the statute, is arbitrary, and it unlawfully discriminates against a debtor in bankruptcy.”

According to the lawsuit, several bankruptcy courts have already signed emergency orders that enjoin the implementation of this rule, forbid any discrimination against debtors and require the SBA to preserve the funds applied for by debtors before they are exhausted.”

As a result, Hartshorne said it is asking the court to grant a temporary restraining order and preliminary injunction against SBA administrator Jovita Carranza before the money available under the PPP runs out.

Rumsey, Ky.-based Hartshorne develops and operates coal mining projects in the United States. The company filed bankruptcy on Feb. 20 under Chapter 11 case number 20-40133.

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