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Faced with mounting criticism, Ruth’s Chris Steak House — which operates more than 100 restaurants in North America — will return the $20 million coronavirus small business loan it got from the federal Paycheck Protection Program, NBC News reported Thursday. The $350 billion PPP was designed to rescue the millions of small businesses that have …
Faced with mounting criticism, Ruth’s Chris Steak House — which operates more than 100 restaurants in North America — will return the $20 million coronavirus small business loan it got from the federal Paycheck Protection Program, NBC News reported Thursday.
The $350 billion PPP was designed to rescue the millions of small businesses that have seen their businesses dry up because of social distancing shutdowns.
Ruth’s Hospitality Group pocketed two $10 million loans, one for each of its subsidiaries — sparking widespread outrage and a petition drive calling for the company to return the money so it would be available to the small businesses it was intended to help.
The company argued that because it had fewer than 500 at each location it qualified for the program, which quickly ran out of cash and had to be given an added $250 billion to stay afloat, part of a $484 billion stimulus package the Senate passed this week and the House was expected to pass Thursday.
A Change.org petition with more than 261,251 signatures as of Thursday afternoon circulated this week demanded the chain — which charges nearly $100 for a Porterhouse for two at most locations, similar to a high end New York steakhouse — return the money.
“This is a travesty, and a disgusting display of corporate greed during a time of disaster,” the petition reads.
The company would be “shamed forever” if it didn’t fork over the money, the petition added.
Shake Shack already announced it wold return the $10 million it got from the PPP program after a similar public outcry.
After the names of large publicly traded companies who got funding under the program were made public, Treasury Secretary Steve Mnuchin warned that PPP was not intended for these kinds of companies and said there would be penalties unless they gave the money back, the network reported.
“I think a lot of these big companies, it’s questionable whether they can make that certification,” Mnuchin told Fox Business Network on Wednesday.
Shake Shack and Ruth’s Chris both got their loans from banking giant JPMorgan Chase.
On Thursday, the SBA updated its PPP guidance, declaring: “It is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith.”
The SBA said any company that gives the money back before May 7 will be deemed to have acted in good faith.
