Planet Hollywood is suing Miami-based BankUnited for allegedly turning a pandemic lifeline into a mountain of debt.
In a lawsuit filed on July 2, the restaurant chain accused the $35 billion-asset bank of mishandling a government-backed loan from the COVID era, leaving the borrower owing more than $6 million. Most of that debt would have been discharged if not for BankUnited's "fraud" and "negligence," according to Planet Hollywood.
"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 lawyers wrote in their complaint.
A BankUnited spokesperson declined American Banker's request for comment, saying the bank does not speak publicly about pending cases. Planet Hollywood's attorneys said the company had no comment beyond what was written in the complaint.
The lawsuit, which was filed in Florida state court, was earlier reported by
The saga dates back to the early days of the
But just one month after approving the loan, the complaint alleges,
Planet Hollywood complied. As a result, the new loans were now subject to a rule implemented by the Small Business Administration on May 4, 2020. As such, the debt was no longer eligible for forgiveness — at a time when the SBA was forgiving many other such loans.
According to Planet Hollywood, BankUnited made this demand under false pretenses. The bank allegedly claimed that breaking up the loan was necessary to comply with the new SBA rule, even though the rule explicitly did not apply retroactively.
And there was allegedly also a threat: If Planet Hollywood did not follow BankUnited's instructions, the bank would recall the original loan.
Consequently, the lawsuit says, Planet Hollywood ended up owing $4,505,978 that would have otherwise been forgiven by the SBA. In the meantime, BankUnited collected more than $125,000 in loan origination fees, thanks to the seven 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," Planet Hollywood's lawyers wrote. "BankUnited persisted in its course of action to coerce Plaintiffs to file new, separate loan applications in conscious disregard of the consequences."
The restaurant chain is now suing for "all loans and interest," totaling more than $4.5 million, that it currently owes as a result of BankUnited's alleged actions.
Planet Hollywood has had a long history of financial trouble. In its 1990s heyday, the chain operated more than 60 restaurants around the world, as well as hotels and casinos. But it later filed for bankruptcy, once in 1999 and again in 2001.
Today the chain's website lists only two restaurants and five resorts, at least one of which is owned by a different company.
