Restaurant Revitalization Fund Facing More Legal Action

Photo courtesy of The Infatuation

In light of the most recent news that the Restaurant Revitalization Fund is permanently closing its portal on July 14th, following several discrimination lawsuits and continuously unclear communication with applicants, the Independent Restaurant Coalition has announced that it has filed a Freedom of Information Act request. The restaurant advocacy group is requesting that the Small Business Administration release more information to the public regarding what exactly happened with the Fund and why it rescinded funding approval after the three discrimination lawsuits won their cases on the basis of a discriminatory prioritization structure. Here is a boiled-down timeline:

• The RRF opened May 3rd 

• For the first 21 days, only women, veterans, and socio-economically disadvantaged restaurant owners could apply and receive priority review 
• The RRF stopped accepting applications May 24th 
  • Due to having received applications asking for more than twice the $28.6 billion allocated by Congress
• Congress introduced legislation for the Restaurant Revitalization Fund Replenishment 
  • There are no updates on this development 
• The Small Business Administration is challenged in court by multiple lawsuits in June
  • All 3 lawsuits were filed by white, male restaurant owners who claimed they were discriminated against because of the SBA’s prioritization 
  • The courts ruled that the prioritization structure was unconstitutional 
• The RRF subsequently halts payments to priority pre-approved applicants 
• The RRF rescinds pre-approved applicants and rejects applicants 
• The RRF announces it is closing the portal July 14th and will not take any more applications

This week the SBA released data on various aspects of the program, including average grant size – $283,000 – and the number and percentage of grants based on revenue bracket, state, and business type. Although this increased transparency, the Independent Restaurant Coalition is demanding more information on how the grants were approved in the first place. 

The Freedom of Information Act request will be used to ask for: 

• The zip code of applicants
• The date and time each application was submitted 
• The date and time the SBA began processing applications
• The date and time the SBA approved applications
• The date and time the SBA communicated approval to applicants 
• The date and time the SBA paid funds to the applicant 
• The amount of funds paid 
• The manner in which applicants were deemed eligible for prioritization
• Information regarding how the discrimination lawsuit changed application processing, specifically related to the prioritization structure 
• The number of businesses that were approved but had their funding rescinded 

The Independent Restaurant Coalition has been in contact with the SBA, however the agency has yet to clarify anything regarding the future of the Fund. 

Founded by attorneys Andreas Koutsoudakis and Michael Iakovou, KI Legal focuses on guiding companies and businesses throughout the entire legal spectrum as it relates to their business including day-to-day operations and compliance, litigation and transactional matters.

Connect with Andreas Koutsoudakis on LinkedIn.

Connect with Michael Iakovou on LinkedIn.

This information is the most up to date news available as of the date posted. Please be advised that any information posted on the KI Legal Blog or Social Channels is being supplied for informational purposes only and is subject to change at any time. For more information, and clarity surrounding your individual organization or current situation, contact a member of the KI Legal team, or fill out a new client intake form.