The Small Business Administration overstepped its authority in setting a $20 million cap on Paycheck Protection Program loans, according to lawsuits filed Monday by nursing home company Accordius Health and its 47 affiliates.

The lawsuits name as defendants the SBA; Isabella Casillas Guzman in her official capacity as SBA administrator; Janet Yellen in her official capacity as secretary of the Treasury Department; and the US government.

According to court records, the Accordius Health affiliates were deemed ineligible for PPP loans in November because the company as a whole had exceeded the borrowing cap. Accordius Health appealed the decision, claiming that the limit was “improper because it is not found in the CARES Act or in the Economic Aid Act.” 

Initially, PPP loans were limited to no more than $10 million for a single eligible borrower. Later, the SBA placed a $20 million cap on PPP loans that businesses in a “single corporate group” could receive.

But in the complaint, Accordius Health said that “Congress never adopted a limitation in the form of a maximum cap that a so-called ‘corporate group’ might borrow or seek forgiveness of, and did not even mention corporate groups as a category.”

The SBA’s Office of Hearings and Appeals upheld the SBA’s decision, ruling that the Accordius Health affiliates are, indeed, part of a corporate group and bound by the $20 million borrowing limit. The company, however, maintains that each Accordius Health facility is “a separate and distinct operating company from the other 47 entities for which SBA denied loan forgiveness.”

In separate filings, Accordius Health affiliates are petitioning the District Court for the Western District of North Carolina, Asheville Division, to reverse SBA’s Nov. 1 decision denying the company’s request for loan forgiveness, as well as the OHA’s March 8 and April 10 orders affirming the SBA’s decision and, as a result, an order directing SBA to forgive the Accordius Health’s PPP loan loans.

The company also is asking to be reimbursed by the SBA “for all sums repaid (and that will be repaid) on the PPP loan, plus interest, in an amount to be proven, attorneys’ fees and such other and further relief as the court may find just and proper.”

The law firm representing Accordius Health and affilates had not responded to a request for comment by the publication deadline.