Stress is mounting on a Houston oil gear builder to return $10 million in federal funding meant for small companies after a company watchdog group revealed Wednesday {that a} enterprise entity managed by Purdue Pharma’s Sackler household is the corporate’s largest shareholder.
Piton Capital Companions, an organization managed by Sackler household funding fund Kokino, owns a virtually 12 % share in Gulf Island Fabrication. The billionaire household additionally controls certainly one of 10 board seats within the firm by way of Kokino portfolio supervisor Robert Averick.
Gulf Island received a $10 million loan in April by way of Congress’ Paycheck Safety Program. The federal program provides forgivable loans to small companies with the settlement they don’t lay off their staff through the pandemic.
Public Accountability Initiative, a company watchdog group based mostly in Buffalo, N.Y., first reported the Sackler household connection to Gulf Island in a report published Wednesday. Members of the Sackler household based and personal Purdue Pharma, the Stamford, Conn.-based maker of the extremely addictive opioid OxyContin that was a goal of quite a few lawsuits within the wake of the nation’s opioid disaster. The household, which Bloomberg estimated to have a internet value of $13 billion in 2018, isn’t concerned within the day-to-day operations of Gulf Island, nevertheless.
“The PPP was created to assist struggling small companies, not large companies with entry to main traders and borrowing capability,” stated Derek Seidman, a analysis analyst with Public Accountability Initiative. “A worldwide chief within the power business shouldn’t be taking bailout cash that small struggling companies desperately want.”
Gulf Island, which has a market worth of almost $43 million, is the newest publicly traded firm going through scrutiny for requesting and accepting a PPP mortgage. Different corporations which have come below fireplace for taking federal funding earmarked for small companies embody Ruth’s Hospitality Group, the mother or father of Ruth’s Chris Steak Home; New York-based hamburger chain Shake Shack; and Houston-based Luby’s Inc. Ruth’s and Shake Shack have returned their PPP cash. Luby’s has not stated what it plans to do with its mortgage proceeds.
Gulf Island, which makes ships and heavy gear for offshore oil and gasoline drilling, was requested this month by Home Democrats to return its $10 million mortgage and “enable really small companies — which should not have entry to different sources of capital — to acquire the emergency loans they should keep away from layoffs, keep in enterprise and climate the financial disruption attributable to the coronavirus disaster,” based on a letter despatched by the Home Choose Subcommittee on the Coronavirus Disaster to Gulf Island on Could 8.
The corporate reported $48.6 million in money and entry to a $40 million revolving line of credit score throughout its most up-to-date quarter that ended March 31. The corporate, which has greater than 900 staff, reported a lack of almost $49.four million and income of $303 million in 2019.
Gulf Island didn’t reply to requests for remark. The Sackler household didn’t reply to a request for remark. Averick, the portfolio supervisor of Sackler household funding agency Kokino and a member on Gulf Island’s board, declined to remark.
Anita Mancini, who together with her husband owns Bugs Inc., an insect extermination firm in Katy, stated she is offended that giant companies are taking federal {dollars} earmarked for small companies like hers. The Katy resident utilized for a PPP mortgage final month however needed to wait six weeks earlier than receiving a $61,000 mortgage on Could 11, sufficient to cowl two and half months of payroll for her seven staff.
“That $10 million that’s going to 1 firm might have helped 100 small companies,” Mancini, 52, stated. “It’s despicable that corporations are taking greater than their fair proportion. These are corporations you depend on to step up and put cash in whenever you’re in a disaster, not take it out.”
paul.takahashi@chron.com
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