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WSR Here's part of an article on how companies used or misused their loans. https://www.msn.com/en-us/money/smallbusiness/publicly-traded-firms-paid-dividends-bought-their-own-stock-after-receiving-ppp-loans-to-pay-employees/ar-BB19oNwp?li=BBnb7Kz&ocid=U483DHP "Others may have been legally required to pay the dividends. Whitestone Real Estate Investment Trust, a Houston-based company that owns 54 shopping centers in Texas and Arizona, acted quickly to free up cash when the stock market entered its deep dive in mid-March. It drew down the full amount of a $30 million line of credit and stopped acquiring new properties. It also reduced its usual stock dividend by about two-thirds, a move that saved another $30 million. The company also availed itself of a $1.7 million PPP loan to support 91 employees, according to SBA and SEC records. Throughout it all, the company was required by law to keep paying dividends to Wall Street. Whitestone spokesperson Amy Feng said real estate investment trusts like Whitestone are required to put 90 percent of their income toward dividends. The company has continued to pay dividends as commerce has returned to its shopping centers; it declared on June 16 that it would pay out another $4.5 million in dividends, with separate payouts in July, August and September. Feng said the PPP funds were walled off from other funds in a separate bank account and spent to pay employees. “In applying for the PPP funds, Whitestone fully complied with all requirements, including by demonstrating that economic uncertainty made the loan necessary to support ongoing operations, and by using the funds to retain workers and maintain payroll,” Feng said in a statement." |
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