Golden Corral franchisees reject allegations in Saratoga bank’s PPP lawsuit



BALLSTON SPA — A local family is pushing back against a bank’s allegations that they and their 10 companies misused small-business bailout loans provided amid the COVID-19 crisis.

Adirondack Trust Company sued Niral A. Patel and Nirmala A. Patel earlier this month to recover nearly $2 million in federal Payroll Protection Program funds disbursed to 10 of their corporate entities. They operate the Saratoga Springs Comfort Inn and Suites and, as franchisees, operate eight Golden Corral restaurants in New York and New Jersey, including those in Colonie, Queensbury and Wilton.

Niral and Nirmala are residents of Saratoga County and Schenectady County, respectively. The legal paperwork identifies Nirmala as Niral’s mother, and indicates both are shareholders in the 10 corporate entities that received loans. The lawsuit names the 10 as corporate defendants, and also indicates that Niral is an officer in each.

The bank alleges that the money was shuffled between various accounts, including Nirmala’s personal checking account, and not used for the intended purpose: keeping the 10 companies afloat through the COVID crisis.

Justin Heller of the Albany law firm Nolan Heller Kauffman, representing the Patels and their companies, provided the following response via email:

“The complaint filed by Adirondack Trust Company against Niral and Nirmala Patel and their various hotel and restaurant businesses came as a surprise to the Patels. The family has owned and operated the Saratoga Comfort Inn and Suites and Golden Corral restaurant for nearly twenty years, as well as six other Golden Corral restaurants in New York and New Jersey.

“Prior to the pandemic, the Patels’ businesses had up to 500 employees. Like many hotel and restaurant operators, the Patels were forced to close their doors in March to slow the spread of the coronavirus. The Golden Corrals’ buffet format has precluded the Patels’ reopening. During the past five to six months, the Patels have worked on plans to transition their restaurants under a new non-buffet dining format.

“The Patels received $1,979,600.00 in Payroll Protection Program (PPP) loans through the Adirondack Trust Company, with which the Patel family has done business for more than 20 years. As a result of the seven restaurants remaining closed since March 18th, the Patels have not used any of the PPP proceeds. The Patels’ reopening plans are dependent on the availability of the PPP money to bring back employees and to fund other operating expenses as permitted under the PPP loan program. The bank has blocked the Patels’ access to the PPP money since September 23rd.

“Adirondack Trust Company’s decision to block access to the PPP funds and file suit against the Patels and their businesses is particularly surprising and unsettling given these difficult and uncertain times for restaurant businesses, the Patels’ longstanding relationship with the Adirondack Trust Company, and their plans to use the funds for the purposes intended by the PPP program. Adirondack Trust Company’s claims are without merit and replete with errors and mischaracterizations. The Patels fully intend to defend this action and look forward to moving forward with their business plans.”

The PPP was one of the key parts of the federal relief and stimulus packages approved on an urgent basis this past spring as the COVID-19 pandemic paralyzed the economy and squeezed some business owners to the brink of failure. The program offered qualifying companies low-interest loans that would be forgiven altogether if the borrowers met conditions including job retention.

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