Lawsuit impacts Ohio veteran-owned business
LORAIN, Ohio — Legal action taken outside the state of Ohio stopped businesses from getting relief funding.
After 25 years as an air traffic controller, Navy veteran Kurt Hernon decided to turn his hobby into a job.
“We just did a couple pop-up events at a bar in downtown Lorain, and they were well attended, and we saw that there was an audience for it here,” explained Hernon.
He moved to Lorain about 30 years ago and started Speak of the Devil with his wife. It’s a cocktail bar in downtown Lorain, a place he said has come a long way in recent years.
“It was unrecognizable to be honest. Sidewalks were a mess, most of these buildings were empty,” said Hernon. “It’s a drastic change, and it’s for the better.”
But that progress faced a major roadblock when COVID hit the restaurant industry.
“We kind of changed how we operated, moved to bar snacks, stretched everyone out in here and masked up for most of the year,” said Hernon. “Wasn’t easy, wasn’t fun, but you had to figure out ways to be nimble and figure out ways to survive.”
Hernon took advantage of government relief funds to help pay for personal protective equipment and get some money, but when the American Rescue Plan became law, a series of lawsuits shut his business out.
“What the judge did is eliminate us from the process and let everyone else be funded,” said Hernon.
The American Rescue Plan’s Restaurant Relief Fund from the Small Business Administration prioritized veteran, woman and minority-owned businesses during the application process. Hernon’s businesses fits two of the criteria.
But lawsuits in Texas and Tennessee over the prioritization stopped the funds from coming to his business.
“It was extremely frustrating just because you know, it took us out of the process. I mean, the lawsuit basically froze the priority applicants out of the process. It hurts, like wow,” said Hernon.
The Small Business Administration told Spectrum News 1 that applicants for the RRF qualified for more than $70 billion in relief, but only about $28 billion was available in the fund.
“Right off the get-go, only about a third of those who needed the money were going to get it,” said John Barker with the Ohio Restaurant Association.
Barker, the president and CEO, said the RRF had tight qualifications, mainly significant losses to your business in 2020. When priority applicants went back into that large pool of applicants, many missed out.
“It put everybody back into the hopper, unless you were already granted the money, because it seemed like some people were already granted the money, but others that were in that process were told that they were going to get the grant, but then it was pulled back,” said Barker.
And as Hernon and his business continue to navigate through the pandemic, he hopes congress will act to help those seemingly left behind.
“They know exactly how many applicants there were and they know exactly how much money they need to fund everybody, which would seem fair and equitable to me at this point,” Hernon said.