Planet Hollywood has filed a lawsuit against Miami-based BankUnited, accusing the financial institution of transforming what was meant to be a pandemic relief loan into a burden of more than $6 million in unforgiven debt.
The lawsuit, filed July 2 in Florida state court, claims that BankUnited mishandled a Paycheck Protection Program (PPP) loan during the height of the COVID-19 pandemic. According to the restaurant chain, the $35 billion-asset bank engaged in “fraud” and “negligence” that left Planet Hollywood stuck with a significant debt that should have been forgiven under federal guidelines.
“But for BankUnited’s actions, misrepresentations, and threats to Plaintiff … at least $4.5 million of the loans would have been forgiven,” Planet Hollywood’s attorneys wrote in the complaint.
BankUnited declined to comment on the lawsuit, citing a policy of not discussing ongoing litigation. Planet Hollywood also did not provide additional comment beyond its court filings. The legal action was first reported by Law360.
The dispute centers on a PPP loan issued in April 2020, when the federal government was distributing forgivable loans to help businesses survive the economic impact of COVID-19. Planet Hollywood secured a loan of more than $7 million through BankUnited.
However, the complaint states that just a month later, BankUnited instructed Planet Hollywood to divide the single loan into seven smaller agreements—an unusual move. The new loans, executed after May 4, 2020, became subject to a recently introduced Small Business Administration (SBA) rule, which made them ineligible for forgiveness.
Planet Hollywood contends that BankUnited falsely told them the rule required this restructuring, even though the regulation was not retroactive. The bank also allegedly threatened to call back the original loan if the chain didn’t comply.
As a result of this restructuring, Planet Hollywood claims it is now responsible for $4,505,978 that otherwise would have been forgiven. Meanwhile, BankUnited reportedly earned more than $125,000 in origination fees from the new loans.
“These breaches were conscious, voluntary acts which BankUnited knew created a clear and present risk that Plaintiffs would lose their eligibility for loan forgiveness,” the complaint states. “BankUnited persisted in its course of action to coerce Plaintiffs to file new, separate loan applications in conscious disregard of the consequences.”
Planet Hollywood is seeking repayment of the full loan amount and interest—over $4.5 million—stemming from what it claims were deliberate missteps by BankUnited.
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