When the United States government announced that they had created the PPP program in order to help businesses better survive the COVID-19 pandemic, many saw it as a good thing.
While many businesses benefitted tremendously from the government initiative, there was also the unforeseen public backlash due to major corporations also accepting the PPP loans.
Some thought that corporations receiving assistance was distasteful, considering many major corporations didn’t need the government’s money to stay afloat.
Despite the many boisterous complaints, acclaimed lawyer John Houghtaling is one individual who favors the PPP loans, no matter the business size.
“I have a client that has 600 property locations across the country,”
Houghtaling says.
“They are a public multibillion-dollar company and they applied for a PPP loan and they got it, and it was in the press.”
While some were critical of Houghtaling’s client because they felt the company didn’t need the loan in order to stay in business, Houghtaling insists that determining whether a business should be eligible for a PPP loan is no easy task.
Explains Houghtaling:
“To understand that question, of course the devil is always in the details. You have to understand exactly what the PPP loan is. To just say they [businesses] are taking a government loan and they don’t need it, that’s one thing. I have a lot of criticisms of PPP, but the way that it is operating is that it’s a loan that has to be used for mainly payroll. The consequences of not filing for the PPP loan is that you shut the store down and you don’t pay the employees.”
And Houghtaling is quick to point out that when businesses accept a PPP loan, that doesn’t mean their bottom line suddenly flourishes.
“What is happening in a lot of instances, like with my client, is that they are taking it to keep people on the payroll,”
says Houghtaling.
“It doesn’t go into your pocket. It’s not profit. It’s the expenses associated with keeping the doors open and keeping those employees in place. That’s the way it’s supposed to work. If you don’t take it and you turn it down, the consequences can hurt the employees.”
All this is why Houghtaling is not opposed to large companies taking advantage of PPP loans.
For those who think that big businesses accepting PPP loans are immoral or overly greedy, Houghtaling has a counterpoint.
“Look, you can say that they [businesses] can afford to not take the loan, but people are in business and what is generally going to happen is when there’s no business, people will be furloughed and shut down,”
he says.
“Most businesses are going to shut down and not keep people on payroll just for the heck of it. They’re going to shut people down. The devil is in the details because everything is not so simple. We get into this too much in our country with social media by making things too simple. The details matter.”
Through everything, Houghtaling is quick to mention that while the PPP loans have caused disagreement among the general populous, the core issue is much different from what is being presented.
This is because while businesses and the general public argue over the distribution of PPP loans, the major insurance companies are reaping immense profits due to denying claims that in many cases are completely justified.
“The biggest problem I have with PPP is not bailing out big corporations, but bailing out the insurance companies,”
Houghtaling says.
He then explains how the PPP loans are aiding businesses during these unforeseen times, even though many businesses have insurance policies that should be covering their financial hardships.
Perhaps unsurprisingly, the reason these businesses are not able to invoke their insurance policies is due to some crafty lobbying on the part of the major insurance companies.
“Insurance companies have denied business interruption on all of those policies,”
Houghtaling states, adding that this exact issue is something that he and his legal team have been fighting throughout the course of the last calendar year.
“I’ve been helping to lead that litigation nationally, but they [insurance companies] are fighting us tooth and nail and it’s going to go all the way up to the state supreme courts.”
And it’s not as if Houghtaling and his clients don’t have a legitimate case.
“There’s no doubt that a lot of these policies one hundred percent apply,”
Houghtaling says, before referencing the SARS pandemic of 2003.
“Back then, they [insurance companies] admitted to every state insurance commissioner that if we don’t have a very specific exclusion with viruses, there is coverage.”
In spite of this precedent, insurance companies today are deferring responsibility and looking to the government to take care of their policyholders.
In fact, it is the insurance companies who are the biggest proponents of the PPP loans.
“The insurance companies are actually driving the PPP loans. They are lobbying for the PPP loans so that the insurance companies don’t have to pay,”
Houghtaling reveals.
“What ends up happening is the taxpayers pay and unfortunately in every storm I’ve been involved with, the same thing happens over and over again. In Louisiana it was called the `road home’ and in other places you had these programs where even though most people are insured for casualty for a disaster, the insurance companies still don’t pay.”
As for why insurance companies are so reluctant to support their loyal policyholders, Houghtaling says it’s simply a matter of leverage, something that homeowners have little of when compared to the monster insurance carriers.
“The insurance companies hold the deck, and in every disaster they don’t pay and people suffer. The senators and the congressmen go to the federal fisk and they pass a law, and they take it from the taxpayers. They bail out the insurance companies,”
Houghtaling explains.
“What’s really happening is that in every casualty event, the insurance companies have been ensuring that casualty loss and it has become an industry where insurance denies the casualty stuff on a mass scale and then forces people to take it from the taxpayers. Then once people have money, they no longer pursue the insurance claim. Insurance companies benefit from it.”
Dealing with this vicious cycle of manipulation and greed is nothing new for John Houghtaling.
Watch past videos of John Houghtaling as he explains past transgressions on account of the insurance companies.
To read about how John Houghtaling and his law firm are handling claims for the natural disaster down in Lake Charles, Louisiana, read this article from the Roofing Insights Magazine.
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