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US venues file lawsuits over rejected Covid relief

More than 60 lawsuits have been filed over the Shuttered Venue Operators Grants (SVOG), the $16 billion aid launched by the US federal government to help live venues survive the pandemic.

A year after the US Small Business Administration (SBA) rolled out the Covid-19 relief programme, the agency is facing dozens of pending lawsuits from companies who say they were unfairly denied millions in relief, according to Billboard.

According to the aggrieved venues, SBA has refused their requests without good reason or a proper explanation, putting particular companies at a huge disadvantage over rivals who have received aid. Attorneys involved in the cases claim that rates of refusal under SVOG “significantly exceed typical government grant programmes.”

Concert Investor LLC, a Tennessee firm that has produced shows for the likes of Twenty One pilots, Little Big Town, O.A.R., is among the companies that have filed lawsuits.

Citing a 94% drop in revenue during the pandemic, the company sought nearly $5 million in aid under SVOG. However, the SBA decided the company didn’t meet the criteria to be a concert producer, saying the company “at best” merely “serves the needs” of artists by providing lighting and sound tech.

At least 33 lawsuits were still pending in federal court as of last week, according to a court filing by the SBA

In a motion filed in court Monday (2 May), Concert Investor’s attorneys asked a federal judge to grant the company a final judgment in its case, arguing the SBA had “ignored” ample evidence about its eligibility and had unfairly awarded grants to direct competitors who provide the exact same services.

“This disparate treatment has placed Concert Investor at a severe and worsening competitive disadvantage relative to other concert producers that can use their SVOG awards to restore and grow their businesses while Concert Investor is deprived of the federal assistance for which it too qualifies,” the company wrote. SBA will soon file its own brief, and the judge will rule on the case in the months ahead.

Some of the lawsuits, however, maybe in the process of getting resolved. Last week, the SBA said it would reconsider refusing $497,000 in aid to Superfan Live Inc., which offers VIP experiences at concerts from artists like Bon Jovi, Genesis, and Journey. The agency asked a federal judge for extra time so that it could “thoroughly examine the allegations in the complaint prior to issuing a new decision”.

At least 33 lawsuits were still pending in federal court as of last week, according to a court filing by the SBA.

Since it debuted in April 2021, the SVOG has handed out just over $11 billion to more than 13,000 businesses in a first wave; a second round of supplemental grants awarded an additional $3.4 billion to more than 9,000 businesses.

The SVOG, also known as the Save Our Stages Act, is part of a $1.9 billion American Rescue Package which was signed into law by President Joe Biden in March 2021.

 


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