September 25, 2022

Moss Adams Got Sued Because They Kinda Forgot to Tell the Client About an Important COVID Relief Deadline (Allegedly)

Thanks to the tipster who sent this over.

The California comedy club that helped launch the careers of such comedy greats as Richard Pryor, Robin Williams, and David Letterman to name a few is suing Moss Adams because they say they missed out on $8.5 million in COVID relief funds thanks to Moss Adams not getting the application in on time.

Toward the end of 2020, Congress authorized $16 billion in relief money to live venues affected by lockdowns and the Comedy Store was one such business devastated by mandatory closures as their business dipped almost 90% in 2020. The Small Business Administration opened the application period for these Shuttered Venue Operator Grants on April 8, 2021 and said it would keep accepting applications until funds were exhausted, no deadline was given at first but on August 11, the SBA announced the application period would close just before midnight on August 20.

So what happened, why did the Comedy Store miss out, and why is this (allegedly) Moss Adams’ fault?

Yahoo! Sports reports:

Harold Breslow, a former partner at Moss Adams who was working as the comedy club’s acting controller, reached out to Moss Adams in July 2021 to seek help applying for a grant. According to the suit, Breslow was connected to Aparna Venkateswaran, an accountant at Moss Adams who dealt with the SBA.

They had a phone conversation on July 22 about applying for the grant, while Breslow advised that he was about to go on a two-week vacation. Breslow returned to the office on Aug. 16 and continued to work on the application. At no point, according to the suit, did Venkateswaran warn him that the deadline to submit the application was approaching.

Remember the SBA said on August 11 that the application period would close on August 20. That bit is important to what happened next.

Breslow and Venkateswaran talked about the application on the phone on Aug. 25. When Breslow logged into the SBA portal to work on the application on Aug. 26, he discovered that the site was no longer accessible. According to the suit, Venkateswaran told him she was “surprised” she had not heard anything about the deadline from the SBA.

“The Store engaged Moss Adams and Moss Adams induced the Store to engage it, to avoid exactly what happened,” the suit states. “And Moss Adams’ response was a metaphorical shrug of the shoulders.”

Yahoo! Sports adds that the terms of the Comedy Store’s agreement with Moss Adams limits the firm’s liability to the total cost of its services — in this case, $275. The lawsuit says because the firm’s conduct was grossly negligent, fraudulent, and willful, that limit shouldn’t apply. The Comedy Store wants Moss Adams to pay $8.5 million, the amount of relief funds the club likely would have received had the deadline been met.

Oh, and there’s also this:

The suit also states that Moss Adams later informed the Comedy Store that it had lost the club’s client file.

LOL. We’ll keep you posted.

The Comedy Store v. Moss Adams LLP et al, case number 2:22-cv-05161 [Law360]

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