Local restaurant group received $5-$10M in paycheck protection funds

Cunningham Restaurant Group retained 85% of workforce but ex-employees raised concerns
0803  KK pics 3.jpg
Posted at 5:46 AM, Aug 05, 2020
and last updated 2020-08-05 08:08:22-04

The Rebound is our commitment to ensuring systems in place are helping businesses and workers get back on their feet amid this pandemic.

INDIANAPOLIS — Call 6 Investigates is digging into how some central Indiana businesses received millions in federal funding yet also eliminated jobs.

Former workers with Cunningham Restaurant Group brought their concerns to Call 6 Investigates.

Cunningham Restaurant Group owns more than a dozen restaurants including Bru Burger, Mesh, Vida, and Union 50.

0803  KK pics 1.jpg

Two workers contacted RTV6 saying they were laid off by Cunningham Restaurant Group, and one employee told RTV6 that CRG received money from the Paycheck Protection Program — federal funds meant to help businesses keep workers on their payroll.

Businesses do not have to pay the loans back as long as they’re used mostly on payroll costs, mortgages, rent and utilities.

On July 6, the U.S. Small Business Administration released data showing CRG received between $5 million to $10 million from the Paycheck Protection Program.

Cunningham Restaurant Group would not say the exact amount it received. A spokeswoman said of their 1,600 employees, they’ve used the PPP loans to help retain 85% of their workforce amid the pandemic.

Carissa Newton, director of marketing for CRG, said some employees left on their own and other positions were eliminated as restaurants restructured due to loss of revenue. The restaurant industry has been hit hard by COVID-19, as government restrictions have forced them to close temporarily and limit capacity.

PREVIOUS | Indianapolis restaurant industry is fighting for help

CRG declined a request for an on-camera interview, and instead provided a statement.

“Cunningham Restaurant Group received eligible funds under the Paycheck Protection Program. Since receiving the funds, we have been able to do exactly what the program was intended to do, in that we have re-employed the bulk of our workforce (over 85% to date) and re-opened our restaurants to service guests at the levels defined by area officials. We are meeting all outlined requirements of the program and will continue to do so until this crisis subsides.”

Call 6 Investigates checked with the Small Business Administration.

SBA District director Stacey Poynter said in general, businesses that have PPP loans have to retain 100% of their full-time equivalent jobs for the loan to be 100% forgiven.

0803  KK pics 2.jpg

In the PPP Flexibility Act, though, Congress included some safe harbors around the job retention element for PPP loan forgiveness.

If a PPP loan recipient does not retain 100% of the jobs and does not meet the safe harbors, the PPP loan forgiveness amount will be reduced, said Poynter.

"When they ask for forgiveness they will have to prove how many jobs they retained through this process," said Poynter.

PREVIOUS | Indiana churches received millions in paycheck protection funds

That means Cunningham Restaurant Group will likely have to pay back some of its loan, in other words, not all of the loan will be forgiven.

Billions of dollars are still left in the Paycheck Protection Program.

"The PPP program is still open through Aug. 8,” said Poynter. “If you haven't applied, please apply."