Who Tells Trump When to Restart the Economy

There will be “a tremendous amount of attention and scrutiny placed on people applying for these loans after the dust settles,” said Mr. Amdur, who leads Pillsbury’s private equity team. Given that borrowers and their backers must provide plans and statements about why they need the money, “I certainly would expect that prominent hedge funds, private equity firms, venture capital firms are thinking about this, and the ones that aren’t I think are either being greedy or foolish, or both,” he added.

• “There is no easier target for a prosecutor and for a false claims act prosecution,” Mr. Amdur said, than a cash-rich company or investor needlessly applying for an emergency loan.

• “We should assume that the loan applications will eventually be discoverable by Freedom of Information Act requests,” he added. Several of his clients decided against pursuing loans “because they don’t want their name showing up.”

“Some people who don’t need the money are grabbing it and sticking it in the stock market because they’re hoping to get some gains,” said Mr. Marks.

• Like Mr. Amdur, he believes that, “Once all the smoke clears, the Department of Justice is going to be very busy next year going after fraudulent claims.” Billionaires and big business will be a target, he said, “but I also think they’ll be making some examples of small businesses who filed fraudulent applications, particularly in a time of need.”

Speaking of private equity bailouts, a major topic in yesterday’s newsletter, a KKR-backed energy company filed for bankruptcy yesterday, with a restructuring plan that factors in funds approved under the government’s small business lending program.

Article source: https://www.nytimes.com/2020/04/15/business/dealbook/coronavirus-trump-reopening-ceo-council.html