Full opinion text
MEMORANDUM OPINION COLLEEN KOLLAR-KOTELLY, District Judge. Elk Associates Funding Corporation (“ELK”) brings this action against the United States Small Business Administration (the “SBA”), seeking relief under the Administrative Procedure Act and the Due Process Clause of the Fifth Amendment to the United States Constitution for the SBA’s allegedly arbitrary and capricious conduct. Currently before the Court is ELK’s [3] Motion for Preliminary Injunction and Temporary Restraining Order (“Motion for Preliminary Relief’). Upon consideration of the parties’ submissions, the relevant authorities, and the record as a whole, ELK’s Motion for Preliminary Relief shall be DENIED. I. OVERVIEW Since 1980, ELK has been licensed to operate as a Small Business Investment Company (“SBIC”) under the auspices of the SBA. Over the years, it has received substantial financial assistance from the SBA and, today, ELK has more than $21 million in outstanding debt obligations that are held directly by the SBA. Beginning in March 2010, as a result of mounting losses, the condition of ELK’s private capital had deteriorated to such a point that the company no longer met the minimum threshold set by regulation — a “condition of capital impairment” that triggered an event of default with an opportunity to cure. On July 20, 2010, the SBA notified ELK that it was in default and warned the company that it had a period of fifteen days to cure its condition of capital impairment. On August 4, 2010, ELK received a modest cash infusion, but because its financial condition had further deteriorated by that point, the cash infusion failed to cure the company’s condition of capital impairment. In the months that followed, ELK pursued a variety of transactions with third-party investors in an attempt to secure the private capital needed to come into compliance with the applicable regulations. In the end, none of those transactions came to fruition and ELK’s financial condition only continued to further deteriorate. On February 22, 2012, more than one year and seven months after ELK was notified that it was in default and needed to cure its condition of capital impairment, the SBA internally transferred the company to a unit responsible for the orderly liquidation of SBICs. Thereafter, faced with ELK’s threats of litigation, the SBA voluntarily agreed to suspend all further liquidation activities and, on March 6, 2012, the SBA issued ELK a second formal notice of its condition of capital impairment, reiterating that the company was in default and warning that it had a period of fifteen days to cure. On March 13, 2012, after ELK proposed submitting certain unfunded commitment letters as a proposed cure, the SBA provided ELK with a letter identifying potential problems with the company’s proposed approach. Claiming that the SBA had imposed unreasonable conditions on its ability to cure, ELK failed to submit the proposed commitment letters to the SBA within the fifteen-day period or, for that matter, at any time thereafter. Instead, ELK commenced this action on March 20, 2012, seeking relief under the Administrative Procedure Act and the Due Process Clause of the Fifth Amendment for the SBA’s allegedly arbitrary and capricious conduct. After the action was filed, the SBA voluntarily agreed to refrain from engaging in further liquidation activities involving ELK until and including April 25, 2012, preserving the status quo until then and affording ELK even more time to cure its condition of capital impairment. ELK now comes to this Court seeking the extraordinary relief of" a preliminary injunction, claiming that me SBA acted arbitrarily and capriciously by failing to provide the company with sufficient notice of its condition of capital impairment or a meaningful opportunity to cure. Everything in the record bespeaks to the contrary. The case comes to the Court after ELK has already been provided formal notice of its condition of capital impairment on two occasions and it is undisputed that ELK continues to have a condition of capital impairment to this day. Despite having more than one year and nine months to do so, ELK has not cured its condition of capital impairment nor has it presented this Court with any credible evidence that it can realistically do so. In fact, ELK’s condition of capital impairment has only worsened over time. On the record presented, the Court concludes that ELK has failed to carry its burden of showing a likelihood of success on the merits. Furthermore, even assuming that ELK will suffer some irreparable harm absent a preliminary injunction, the Court finds that the balance of the equities weigh against the issuance of an injunction. Accordingly, considering the record as a whole, ELK’s Motion for Preliminary Relief shall be DENIED. II. BACKGROUND A. Statutory and Regulatory Background Under the Small Business Investment Act, the SBA is empowered to license private companies, including, at the time of ELK’s licensing, corporations, as SBICs. See 15 U.S.C. § 681(c). To encourage the formation and growth of SBICs, Congress authorized the SBA to provide financial assistance to SBICs by matching up to 200%, and in some cases 300%, of an SBIC’s qualifying capital commitments and investments. See id. § 683(b). This financial assistance, which generally occurs by the SBA’s purchase or guaranty of an SBIC’s debentures or participating securities, is known as “leverage.” See id.; 13 C.F.R. § 107.50. SBICs, in turn, use this low-cost, government-guaranteed capital to make investments in small businesses throughout the United States. 1. SBICs and Capital Impairment The SBA’s Office of SBIC Operations, part of the Small Business Investment Division, is responsible for monitoring SBICs. It is the office that determines whether an SBIC is in compliance with applicable regulations, including, most germane to this action, those relating to “capital impairment.” Capital impairment is a concept that refers to the degree to which the private capital of an SBIC has deteriorated because of accumulated losses, both realized and unrealized, and thus serves as an important indicator of risk in the SBA’s leverage position. See U.S. Small Business Administration, Oversight & Regulations of SBIC’s Investment Division, Standard Operating Procedures 10 06 (“SOP 10 06”), ch. 6 para. 10 (2007). Capital impairment is calculated by adding an SBIC’s undistributed net realized loss and net unrealized depreciation and dividing the result by the SBIC’s private capital. See 13 C.F.R. § 107.1840(c). If an SBIC exceeds the maximum applicable capital impairment percentage, which is established by regulation, then the SBIC is said to have a condition of capital impairment. See id. § 107.1830(c). For SBICs like ELK, a capital impairment percentage in excess of 40% constitutes a condition of capital impairment. See id. § 107.1830(c)(2). SBICs are obligated to determine whether they have a condition of capital impairment “as of the end of each fiscal quarter,” and must “promptly” notify the SBA if they do, id. § 107.1830(e), but the SBA retains the right to make its own determination of an SBIC’s capital impairment “at any time,” id. § 107.1830(f). The SBA calculates an SBIC’s capital impairment percentage based on information provided by the SBIC in an audited financial statement known as a Form 468, which asks an SBIC to provide detailed information about its assets, liabilities, capital, and financial activities. Each SBIC must file an annual Form 468 on or before the last day of the third month following the end of the fiscal year, and an SBIC with outstanding leverage, such as ELK, must also file an interim Form 468 within thirty days of the close of each fiscal quarter. See id. §§ 107.630(a), 107.1220. 2. Capital Impairment as an Event of Default By regulation, a condition of capital impairment is an event of default with opportunity to cure. See 13 C.F.R. § 107.1810(f)(5). When an SBIC has a condition of capital impairment, the SBA must provide “written notice” to the SBIC, id. § 107.1810(g)(1), and afford the SBIC “at least 15 days to cure the default(s),” id. § 107.1810(g)(2)(i). If the SBIC “fail[s] to cure the default(s) to [the] SBA’s satisfaction within the allotted time,” id. § 107.1810(g)(2)(ii), then the SBA may declare the entire indebtedness evidenced by the SBIC’s debentures, including accrued interest and any other amounts owed, “immediately due and payable,” id. § 107.1810(g)(1)(i), institute proceedings for the appointment of the SBA or its designee as the SBIC’s receiver, id. § 107.1810(g)(1)(ii), or avail itself of any other remedies available by statute, id. As aforementioned, the SBA must afford an SBIC “at least 15 days to cure” a condition of capital impairment before invoking any available remedies. Id. § 107.1810(g)(2)(i). Beyond that initial fifteen-day period, however, the SBA has declined to establish categorical time limits for curing a condition of capital impairment, adopting instead a case-by-case approach that leaves it to the Office of SBIC Operations to exercise “prudent business judgment” based on the particulars of a given case. SOP 10 06, ch. 5 para. 8(a). In making its determination, the Office of SBIC Operations must take into account, among other relevant considerations, (i) whether the SBIC has the “ability ... to take the requested action,” and (ii) “[w]hether corrective action was previously requested.” Id. As an example of an appropriate time frame, the SBA has provided that a capital impairment resolution plan should generally be submitted within fifteen days. See id. 3. Transfer to the Office of SBIC Liquidation When an SBIC “cannot or does not cure” a condition of capital impairment, it is transferred from the Office of SBIC Operations to the Office of SBIC Liquidation, the part of the Small Business Investment Division that is responsible for the orderly liquidation of SBICs. U.S. Small Business Administration, Office of SBIC Liquidation, SBIC Liquidation, Standard Operating Procedures 10 07 1 (“SOP 10 07”), ch. 9 para. 2 (2007); see also SOP 10 06, ch. 1 para. 2(b)(4). The primary goal of the Office of SBIC Liquidation is to maximize net recoveries in liquidation, taking into consideration the time value of money, and furthering the integrity of the SBIC program while recognizing the interests of affected parties, such as the small businesses that are funded by SBICs. See SOP 10 07, ch. 1 para. 4(a). An SBIC is said to be “in liquidation” as soon as oversight responsibility is transferred from the Office of SBIC Operations to the Office of SBIC Liquidation. See SOP 10 06, ch. 9 para. 1. Several factors may affect the determination of precisely when transfer is appropriate, including, but not limited to, (i) whether the SBIC has net unrealized appreciation that, if counted, would reduce its capital impairment percentage below the maximum allowable threshold, (ii) whether the SBIC has presented satisfactory evidence of a liquidity event due within three quarterly payment dates that would reduce its capital impairment percentage below the maximum allowable threshold, (iii) whether the SBIC is only “marginally impaired,” defined as being within five percentage points of the maximum allowable capital impairment percentage, and (iv) whether the SBIC is in the process of raising new capital. SOP 10 06, app. 9-1. “In most cases,” an SBIC will be provided advance notice of a “possible transfer” to the Office of SBIC Liquidation. SOP 10 06, ch. 9 para. 4. In addition, “[o]nce a licensee has been transferred, the Office of SBIC Liquidation will send a letter notifying the licensee of the transfer.” Id. 4. Acceleration of an SBIC’s Debentures in Liquidation When an SBIC is transferred to the Office of SBIC Liquidation, “payment of [the SBIC’s] debentures is accelerated.” SOP 10 06, ch. 9 para. 5. Although consistently conflated by ELK, there are actually two distinct steps in this process. As a first step, the SBA “will arrange to repurchase the licensee’s debentures ... from the pooling] [institution] by notifying the trustee of the acceleration of the debentures.” Id. At that point, the SBA holds the debentures directly and, after providing “written notice” to the SBIC, the SBA may accelerate the SBIC’s payment by declaring the SBIC’s entire indebtedness, including accrued interest and any other amount owed, “immediately due and payable.” 13 C.F.R. § 107.1810(g)(1)(i). Unless and until the SBA accelerates the SBIC’s payment, the SBIC continues to repay any debentures and interest on the same terms and conditions as it previously paid, albeit directly to the SBA. 5. Transfer Back to the Office of SBIC Operations When an SBIC is transferred to the Office of SBIC Liquidation, liquidation is not inevitable. Rather, provided “certain conditions are met, the Office of SBIC Liquidation can recommend that a licensee be transferred back to [the Office of SBIC Operations].” SOP 10 06, ch. 9 para. 6. The Office of SBIC Operations “may impose [any] conditions deemed necessary at the time of transfer,” but an SBIC must, “[a]t a minimum, ... demonstrate viability and meet the licensing standards in effect at the time of the proposed transfer.” Id. One of the ways an SBIC may increase its private capital to cure a condition of capital impairment is through a cash infusion. Sometimes, transactions by which third parties infuse cash into an SBIC are structured in such a manner that they result in a change in control of the SBIC, either through a change in ownership or otherwise. By regulation, an SBIC must obtain the SBA’s prior written approval of any proposed transaction that results in a change in control by an individual or entity that has not previously been approved by the SBA. See 13 C.F.R. § 107.410(a). The SBA may condition approval on (1) an increase in the SBIC’s private capital, (2) the transferee’s assumption of personal liability for the SBIC’s leverage, and (3) “any other conditions set by [the] SBA, including compliance with the requirements for minimum capital and management-ownership diversity as in effect at such time for new license applicants.” Id. § 107.440. On this final point, the so-called management-ownership diversity (“MOD”) requirement has its roots in the SBA’s statutory duty to ensure that the management of new SBICs — specifically, those licensed after September 30,1996 — are “sufficiently diversified from and unaffiliated” with their ownership, something that is designed to ensure management’s “independence and objectivity in the financial management and oversight of the investments and operations of the licensee.” 15 U.S.C. § 682(c). But the MOD requirement is not irrelevant for SBICs, like ELK, that were licensed before the applicable statutory date. Rather, as aforementioned, when an SBIC seeks approval for an event that results in a change of control, the SBA may condition its approval on compliance with the MOD requirement. See 13 C.F.R. §§ 107.150(a)(3), 107.440(c). The MOD requirement can be further divided into three separate sub-requirements, only one of which has much bearing on this case — the percentage ownership requirement. See 13 C.F.R. § 107.150(b)-(d). By regulation, no person or group of affiliated persons may directly or indirectly own or control more than 70% of an SBIC’s private capital. Id. § 107.150(b)(1). However, an exemption from the percentage ownership requirement is made for “traditional investment companies].” Id. § 107.150(b)(2). To qualify for the exception, the company “must be a professionally managed firm organized exclusively to pool capital from more than one source for the purpose of investing in businesses that are expected to generate substantial returns to the firm’s investors.” Id. In addition, the SBA will consider: “(i) [wjhether the managers of the firm are unrelated to and unaffiliated with the investors in the firm; (ii) [wjhether the managers of the firm are authorized and motivated to make investments that, in their independent judgment, are likely to produce significant returns to all investors in the firm; (iii) [wjhether the firm benefits from the use of the SBIC only through the financial performance of the SBIC; and (iv) [ojther related factors.” Id. A second way an SBIC may increase its private capital to cure a condition of capital impairment is by obtaining unfunded binding commitments by qualified institutional investors. To qualify, an institutional investor must have a net worth of at least $1 million. See id. § 107.50. Moreover, an unfunded binding commitment from an institutional investor cannot be counted towards an SBIC’s private capital if (1) the institutional investor has a net worth of less than $10 million and (2) the commitment exceeds 10% of the investor’s net worth. See id. § 107.230(b)(4). If those conditions apply, then the commitment must be backed by a letter of credit from a bank acceptable to the SBA. See id. B. Case-Specific Background ELK, a wholly owned subsidiary of Ameritrans Capital Corporation (“Ameritrans”), was first licensed as an SBIC in 1980. Over the years, it has received substantial financial assistance from the SBA. Today, ELK has approximately $21,175,000 of outstanding debentures that were issued between July 2002 and December 2009. A.R. 14. This figure re-fleets, in effect, public monies that have been extended to ELK to facilitate its ability to function in the marketplace. 1. ELK’s Condition of Capital Impairment On June 21, 2010, ELK submitted its interim Form 468 for the fiscal quarter ending on March 31, 2010. A.R. 3. ELK’s submission was more than a month and three weeks late. ELK should have submitted its interim Form 468 by no later than April 30, 2010. See 13 C.F.R. § 107.1220. After reviewing the financial information provided by ELK in its Form 468, the SBA’s Office of SBIC Operations determined that ELK had exceeded it maximum allowable capital impairment percentage— that is, 40% — an event of default with opportunity to cure. See 13 C.F.R. §§ 107.1810(f)(5), 107.1830(c)(2). On July 13, 2010, the Office of SBIC Operations informed ELK that the company had a capital impairment percentage of 40.1%, asked ELK to confirm that it agreed with the calculation, and notified ELK that “[a] condition of Capital Impairment will require the scheduling of a portfolio review meeting to discuss the status of [ELK’s] portfolio and plan to cure the impairment and the possible issuance of a 15 day cure letter.” A.R. 7. Two days later, on July 15, 2010, the Office of SBIC Operations informed ELK that the SBA would “issue (by the end of the week or- early next week) a 15 day cure letter as a result of [ELK’s] Condition of Capital Impairment as of 3/31/10.” A.R. 12. On July 16, 2010, ELK responded to the SBA’s communications “regarding [ELK’s] 40.1% capital impairment as of March 31, 2010.” A.R. 13. ELK represented that it was “actively working on a plan to cure the impairment,” stating that its “Auditors and Board of Directors [would meet] next week to formalize a plan and a response.” A.R. 13. On July 20, 2010, the Office of SBIC Operations, sent ELK a letter (the “Cure Letter”) notifying the company that its 40.1% capital impairment percentage as of March 31, 2010 exceeded the maximum allowable threshold and “instructing] [ELK] to cure its condition of Capital Impairment, no later than 15 days from the date of th[e] letter [ie., August 4, 2010], to SBA’s satisfaction.” A.R, 14. The Cure Letter expressly warned ELK that “[i]n the event .that the condition of Capital Impairment [was] not cured by that date, SBA m[ight] invoke remedies pursuant to § 107.1810(g) to protect its interest.” A.R. 14. By letter dated August 3, 2010, ELK responded to the Cure Letter. A.R. 54. In its letter, ELK conceded that it “was not in compliance with the cited regulations as of March 31, 2010,” and then continued to stated that ELK “ha[d] carefully reviewed this issue and ha[d] formulated a plan to bring [ELK] into compliance, on a pro forma basis, by August 4, 2010 as you have required.” A.R. 54. Specifically, ELK represented that its corporate parent, Ameritrans, would “invest $40,000 of new paid-in capital into [ELK] by August 4, 2010 and thereby cure [ELK’s] capital impairment violation.” A.R. 54. ELK would thereafter “submit a new capital certifícate to SBA demonstrating the basis for [its] compliance with the applicable regulations as well as a pro forma 468 reflecting the infused capital.” A.R. 54. On September 1, 2010, an Account Executive in the Office of SBIC Operations, unaware of ELK’s letter dated August 3, 2010, reminded ELK that the Cure Letter required a response within fifteen days and indicated that the agency had no record of ELK submitting a response, something that prompted ELK to send another copy of the company’s responsive letter dated August 3, 2010. A.R. 50, 52. Two days later, with ELK’s response in hand, the Office of SBIC Operations asked ELK to provide a copy of the capital certificate referenced in the company’s letter dated August 3, 2010. A.R. 63. When a copy of the capital certificate was not forthcoming, the Office of SBIC Operations requested a copy again on September 17, 2010, and again on September 20, 2010. A.R. 65, 77, 1762. On September 22, 2010, ELK told the Office of SBIC Operations that it intended to “submit a new capital certificate and revised a [sic] pro forma 468 (for the period ending 3/31/10) by Monday September 27th.” A.R. 79. The following day, the Office of SBIC Operations responded, rejecting ELK’s suggested approach. A.R. 79. In its response, the Office of SBIC Operations instructed ELK that “the new capital certificate and pro forma 468 would not be as of 3/31/10,” that instead “[t]he appropriate date would be the date of the capital infusion which took place subsequent to 3/31/10,” and that as a result “there would not be any adjustments to [ELK’s] 3/31/10 financials.” A.R. 79. In other words, ELK was on notice that its condition of capital impairment would be evaluated on an ongoing basis, or at the very least as of the date of the capital infusion, and not for the fiscal quarter ending on March 31, 2010. Despite these express instructions, by letter dated September 29, 2010, ELK submitted a capital certificate based on ELK’s Form 468 for the fiscal quarter ending on March 31, 2010. A.R. 105-16. Subsequently, on October 6, 2010, ELK submitted a letter from its banking institution confirming that $40,000 was deposited into its account on August 4, 2010. A.R. 123-24. On October 19, 2010, ELK submitted a draft of its annual Form 468 for the fiscal year ending on June 30, 2010, and it submitted a final version on November 22, 2010. A.R. 172-81. Even if ELK’s first submission had been in final form, it would have been untimely. ELK should have submitted its annual Form 468 by no later than September 30, 2010. See 13 C.F.R. § 107.630(a). In any event, the financial information provided by ELK evidenced that, by the end of the fiscal year on June 30, 2010, ELK’s condition of capital impairment had worsened, such that its capital impairment percentage had risen to 43.5%. A.R. 199, 1762. Significantly, as a result of ELK’s deteriorating financial condition, the $40,000 capital infusion on August 4, 2010 was insufficient to cure ELK’s condition of capital impairment. A.R. 199, 1762. Indeed, in a written submission provided to the SBA on October 12, 2010, ELK acknowledged that its capital impairment percentage exceeded the maximum allowable threshold at the end of the fiscal year on June 30, 2010, as well as at the end of the fiscal quarter on September 30, 2010. A.R. 139,156. 2. The Proposed CN Transaction On February 8, 2011, approximately seven months and two weeks after the Cure Letter, ELK sent a letter to the Office of SBIC Operations, acknowledging that it had an “existing condition of capital impairment” and informing the Office of SBIC Operations that its corporate parent, Ameritrans, “ha[d] been actively seeking new capital investment.” A.R. 213. ELK then proceeded to describe a “possible” transaction through which a third-party investor, an entity managed by Columbus Nova Partners, LLC (“CN”), would channel a minimum of $25 million in cash into ELK through Ameritrans (the “CN Transaction”). A.R. 213. In addition, ELK informed the Office of SBIC Operations that a subsidiary of the proposed investor had extended Ameritrans a loan in the amount of $1.5 million in order to fund Ameritrans’ “working capital needs” and that, in exchange, Ameritrans had pledged all of its stock in ELK as security. A.R. 214. ELK further indicated that another agreement could follow, “leading] to another more significant investment in Ameritrans ... under conditions which [would] result in an indirect change of ownership of Ameritrans and perhaps control of [ELK].” A.R. 214. The Office of SBIC Operations responded on March 31, 2011 by notifying ELK that, in the agency’s view, the pledge of ELK’s stock constituted a change of control requiring the SBA’s prior approval under the applicable regulations. A.R. 275. On April 15, 2011, ELK assured the SBA that the closing of the CN Transaction was “specifically predicated on obtaining prior written SBA [a]pproval” and that it would terminate the transaction “[i]f pri- or written SBA [a]pproval is not obtained.” A.R. 416. On April 5, 2011, while discussions surrounding the proposed CN Transaction were still ongoing, ELK submitted an updated capital impairment percentage calculation to the Office of SBIC Operations. A.R. 282. Consistent with its prior representations, ELK continued to acknowledge that it had an ongoing condition of capital impairment. A.R. 284. Indeed, by ELK’s calculation, which the Office of SBIC Operations later confirmed, ELK’s capital impairment percentage had risen to 46.64% as of December 31, 2010. A.R. 282, 284. On May 3, 2011, the Office of SBIC Operations, acknowledging that the terms of the proposed CN Transaction would cure ELK’s condition of capital impairment, recommended to the SBA’s Investment Committee that ELK be permitted to pursue its proposal further and, to that end, suggested a meeting between ELK and the Investment Committee. A.R. 437-39. The Investment Committee adopted the recommendation on May 10, 2011, conditioning the occurrence of a meeting on ELK first submitting information about its management team. A.R. 498. Minutes from the session of the Investment Cornmittee evidence that its members were concerned with management’s ability to execute the anticipated investment strategy and the qualifications of the proposed new members of the management team, who had apparently been denied a “green light” letter in the past. A.R. 498. On May 10, 2011, while these discussions were still ongoing, ELK submitted another updated capital impairment percentage calculation to the Office of SBIC Operations. A.R. 483. ELK continued to acknowledge its ongoing condition of capital impairment and, consistent with the past trend, ELK’s capital impairment percentage had again risen — to 51.31% as of March 31, 2011.' A.R. 494. The months that followed involved ELK and CN submitting additional information to the SBA for its consideration, as well as a series of communications and meetings between the Office of SBIC Operations, the Investment Committee, ELK, and CN. On July 12, 2011, approximately three weeks after ELK informed the agency that the new investor in the proposed transaction would be a different entity managed by CN, the Investment Committee met with ELK’s representatives. A.R. 593-94, 710-11. During this meeting, ELK was informed that the proposed CN Transaction, as modified, would likely be treated as if it were a new license application in light of its effect on the control of ELK and, for that reason, ELK would have to proceed through the SBA’s licensing process on an abbreviated schedule. A.R. 711. The Investment Committee also raised concerns about the proposed transaction’s compliance with the MOD requirement — specifically, the percentage ownership requirement. A.R. 711. On July 26, 2011, the Investment Committee again met with representatives of ELK, as well as representatives of CN. A.R. 777, 800-01. During this meeting, and in a subsequent memorandum by its legal counsel, ELK expressed its view that, in lieu of treating the proposed transaction as a new license application and conditioning approval on ELK’s compliance with the MOD requirement, the SBA should consider “grandfathering” ELK for MOD purposes. A.R. 800, 1011-16. In particular, ELK argued that Ameritrans qualified as a “traditional investment company” exempt from the MOD requirement. A.R. 1014. During the July 26, 2011 meeting, the SBA told ELK that it would consider whether “grandfathering” was appropriate, but, at the same time, ELK was put on notice that if the transaction was not approved, consideration would have to be given to transferring ELK to the Office of SBIC Liquidation. A.R. 800. On August 18, 2011, representatives of ELK and CN met with the Associate Administrator for Investment. A.R. 989. On September 7, 2011, ELK informed the SBA that, “[w]ith respect to compliance with management and ownership diversity, [ELK] ha[d] negotiated an economic relationship whereby CN will own less than 70% of the equity of Ameritrans and the balance will be held by existing public shareholders and other investors to be determined.” A.R. 1191. On September 19, 2011, after a series of internal and external communications, the SBA formally notified ELK that, in the agency’s view, “the proposed transaction would not satisfy the requirements of § 107.150 management-ownership diversity requirement” and that ELK “does not qualify for an exception.” A.R. 1198. The SBA informed ELK that it would consider the new ownership structure proposed by ELK in its September 7, 2011 communication, but advised that “[f]or SBA to proceed with review of the change of ownership and control request, [ELK] must provide a specific proposed ownership structure identifying each of the new investor(s), the dollar amount they will invest, and their ownership percentage post-transaction.” A.R. 1198. Approximately two weeks later, on October 3, 2011, the SBA inquired as to the status of ELK’s response to the agency’s September 19, 2011 letter. A.R. 1221. On October 20, 2011, one year and three months after the SBA issued the Cure Letter, the SBA began internally deliberating about the possibility of transferring ELK to the Office of SBIC Liquidation. A.R. 1266. However, on November 15, 2011, ELK submitted a response to the SBA’s September 19, 2011 letter. A.R. 1277. In its response, ELK described a modified transaction in which CN would hold less than 70% of Ameritrans’. stock, the existing management team would remain in place, and the management of both Ameritrans and ELK would report to the Board of Directors of each company. A.R. 1277-89. The next day, the SBA informed ELK that it was actively reviewing the company’s response, informing ELK that the earliest the modified structure could be presented to the Investment Committee would be in December 2011. A.R. 1315. In preparation for that presentation, the SBA requested, and ELK provided, further information regarding the modified transaction. A.R. 1319,1333-41. On December 6, 2011, following oral communications with ELK’s representatives, the SBA notified ELK in writing that the proposed transaction, even as modified, still “may not satisfy diversity requirements.” A.R. 1474. The SBA’s December 6, 2011 communication identified three- concerns relating to the MOD requirement: (1) whether the new capital infusion would effectively be provided by a single entity on behalf of the new investors; (2) whether stock contributions by new investors, as non-cash assets, would qualify as regulatory capital; and (3) whether the new proposed investors were sufficiently unaffiliated. A.R. 1474. During a session held on December 20, 2011, the Investment Committee considered the opinion of the Office of SBIC Operations and the Office of General Counsel that ELK’s proposed transaction still did not satisfy the MOD requirement, and voted to deny ELK’s request for a change of ownership and control. A.R. 1572. On December 22, 2011, the SBA formally notified ELK of its decision, stating that “the revised proposed structure does not satisfy the requirements of MOD as specified in the [agency’s] regulations (§ 107.150).” A.R. 1574. The SBA also identified a number of other concerns, the “cumulative impact” of which “put approval by SBA at risk even if MOD can be satisfactorily resolved.” A.R. 1574-75. Those concerns included the adequacy of the management team and ELK’s prospective investment strategy. A.R. 1575. On January 9, 2012, CN withdrew the proposed transaction from the SBA’s consideration. A.R. 1578. In so doing, CN expressed its appreciation to the SBA for its “extensive consideration of [the] proposed investment.” A.R. 1578. 3. The Proposed BDC Transaction On February 1, 2012, several weeks after the CN Transaction had been withdrawn and more than one year and six months after the Cure Letter, the Office of SBIC Operations recommended to the Associate Administrator for Investment that ELK be transferred to the Office of SBIC Liquidation. A.R. 1580. In its recommendation, the Office of SBIC Operations indicated that (1) ELK had been issued the Cure Letter on July 20, 2010, (2) in the succeeding months ELK’s capital impairment percentage “increased to 59% due to additional unrealized losses and operating expenses,” (3) ELK’s various proposals to cure its condition of capital impairment by raising additional private capital had been denied, and (4) ELK’s financial performance was unlikely to cure its condition “in a reasonable time frame.” A.R. 1580. The following day, February 2, 2012, ELK informed the SBA that CN “has indicated that they [sic] are no longer interested in pursuing a transaction,” but provided that it was “seeking a new equity investor” and intended to submit yet another proposal for raising private capital for the agency’s review. A.R. 1583. Attached to ELK’s February 2, 2012 communication was an overview of the proposed transaction. A.R. 1584-1612. Consistent with the parties’ usage, the Court shall refer to the proposed new investor as “BDC” and the proposed transaction as the “BDC Transaction.” Subsequent communications with ELK revealed that the transaction would involve a $10 million cash infusion from BDC, both ELK and Ameritrans would become subsidiaries of BDC, and two of BDC’s principals would be added to ELK’s management and constitute ELK’s Investment Committee. A.R. 1620. The SBA advised ELK that the proposed transaction would be treated as a new license application and requested additional information from the company. A.R. 1620, 1669. In particular, the SBA advised ELK that it needed to submit a term sheet “as complete as possible,” informing ELK that the SBA’s Investment Committee would render a decision on the information provided and advising ELK to “put [its] best foot forward.” A.R. 1669. ELK submitted a term sheet outlining the proposed transaction on February 9, 2012. A.R. 1674. On February 13, 2012, the Office of SBIC Operations sent ELK a series of questions about the proposed transaction, to which ELK responded in writing and orally on February 14, 2012. A.R. 1694, 1712-16. In its written responses, ELK acknowledged its continued condition of capital impairment. A.R. 1715. ELK also outlined its expectations as to the time frame for resolving its proposal. ELK stated that it hoped to receive “preliminary approval” from the SBA by mid-March 2012 and, assuming that ELK and BDC received “enough comfort,” they intended to “move forward with drafting definitive documentation, preparing a proxy statement and arranging for shareholder votes,” which ELK anticipated would be completed by mid-June 2012. A.R. 1715. On February 15, 2012, the Office of SBIC Operations recommended to the Investment Committee that it deny ELK a “move forward” ruling and instead transfer ELK to the ■ Office of SBIC Liquidation. A.R. 1720. As grounds, the Office of SBIC Operations first found that ELK’s term sheet was “not definite enough to reasonably predict the path that will lead to consummation of the acquisition to SBA’s satisfaction.” A.R. 1720. It next found that “[a]lthough the $10 million capital infusion [would] initially cure [ELK’s] condition of Capital Impairment,” it would “not leave much room for error” because ELK’s “financial performance ha[d] deteriorated over time.” A.R. 1720. It concluded by noting that ELK “had at least $1 million of net losses in each of the last three fiscal years” and had “$5 million of leverage due to SBA within the next 12 month[s],” limiting the “cash available for investment activities.” A.R. 1720. During a session held on February 16, 2012, the members of the Investment Committee unanimously agreed to give no further consideration to the proposal. A.R. 1737. Minutes from the session suggest that the Investment Committee was concerned that a new license application could not be approved in the time frame required and that the cash infusion provided by the transaction would not provide a meaningful benefit. A.R. 1736-37. On February 27, 2012, the SBA formally notified ELK of its decision. A.R 1754. The SBA provided that, “[a]fter significant discussion, the Investment Division ha[d] concluded that the proposal does not address [ELK’s] financial condition to the SBA’s satisfaction,” citing a concern that the $10 million capital infusion would not “have a lasting positive effect” given ELK’s “deterioration and maturing Debenture leverage within the next 12 months,” as well as issues with the current management team. A.R. 1754. 4. ELK’s Transfer to the Office of SBIC Liquidation On February 21, 2012, shortly after the Investment Committee voted to discontinue consideration of the BDC Transaction, the Office of SBIC Operations informed ELK that “[g]iven that [ELK] has not been able to cure its condition of capital impairment, the Office of SBIC Operations will be recommending that [ELK] be transferred to the Office of Liquidation.” A.R. 1741. The decision to transfer ELK to the Office of SBIC Liquidation was finalized on February 22, 2012, more than one year and seven months after the Cure Letter. A.R. 1742-43. The stated reason for the transfer decision was as follows: The Licensee initially developed a condition of Capital Impairment as of 3/31/10 with a Capital Impairment Percentage (“CIP”) of 40.1%. Its maximum permissible CIP is 40%. SBA sent out a 15 day Cure Letter on 7/20/10. SBA has since considered several proposals put forth by the Licensee to cure its condition of Capital Impairment. After significant discussion and consultantion [sic] with the Office of General Counsel, SBA concluded that the proposals did not satisfy regulatory requirements. As of 9/30/11, the Licensee’s CIP increased to 59%. A.R. 1742. ELK was notified of the transfer decision on February 23, 2012. A.R. 1744. On February 24, 2012, ELK responded by asking the SBA to “confirm ... that the SBA will be providing [ELK] with formal notice under 13 CFR 1810(g)(2) of [ELK’s] capital impairment and a 15 day opportunity to cure this event of default.” A.R. 1746. Subsequently, by e-mail dated February 29, 2012, ELK expressed its view that its letter dated August 3, 2012 resolved the Cure Letter because it “statfed] that ... the letter and its attachment were fully responsive to the SBA’s July 20, 2010 letter and [ELK] heard no objections from the SBA.” A.R. 1771. ELK further asserted that “[a]t no time did the SBA advise that [ELK] was not in compliance or that [its] response to the July 20, 2010, letter had not satisfied the SBA’s concerns on the capital impairment issue.” A.R. 1771. In addition, ELK claimed that, during a portfolio meeting held on October 19, 2010, “all present acknowledged that the capital impairment issue had been resolved.” A.R. 1771. ELK concluded by stating that unless the SBA issued a new fifteen-day cure notice, ELK would commence litigation. A.R. 1771. Later that same day, the Office of SBIC Operations asked the Office of SBIC Liquidation to stay the liquidation process. A.R. 1801. 5. The Second Cure Letter On March 6, 2012, the SBA sent ELK another cure letter (the “Second Cure Letter”), stating that ELK “has a condition of Capital Impairment based on its last SBA Form 468 dated September 30, 2011, which revealed a Capital Impairment Percentage ... of 59%.” A.R. 1818. The SBA “direct[ed] [ELK] to cure the violation to SBA’s satisfaction within fifteen (15) days from the date of th[e] letter” — that is, by March 21, 2012 — and warned that, absent timely cure, “SBA may avail itself of any and all legal remedies available to it under Section 107.1810(g) of the Regulations, which include declaring [ELK’s] total indebtedness to SBA immediately due and payable and/or the institution of legal proceedings seeking the appointment of SBA as [ELK’s] receiver.” A.R. 1818. At the same time, the SBA maintained that it “never determined that the $40,000 increase in Regulatory Capital [on August 4, 2010] constituted a satisfactory cure of [ELK’s] condition of Capital Impairment.” A.R. 1819. It reiterated that, “by the time that SBA was made aware of [ELK’s] intent to cure its condition of Capital Impairment by the $40,000 increase to Regulatory Capital, [ELK’s] CIP had increased to 43.5%.” A.R. 1819. The SBA stated its position that ELK was informed during the October 19, 2010 portfolio meeting that “the $40,000 capital contribution was not considered a satisfactory plan to cure its condition of Capital Impairment.” A.R. 1819. The SBA concluded the Second Cure Letter by advising ELK that, “Notwithstanding the transfer to the Office of Liquidation, SBA will suspend liquidation activities for a period of 15 days from the date of this letter to allow [ELK] an opportunity to cure its condition of Capital Impairment to SBA’s satisfaction.” A.R. 1819. On March 8, 2012, ELK acknowledged receipt of the Second Cure Letter. A.R. 1821. After stating its disagreement with the SBA’s position in general and nonspecific terms, ELK indicated that the company would “concentrate on ELK’s efforts to cure the default” and that, “[t]o that end, Ameritrans eontinue[d] to actively engage with various potential investors.” A.R. 1821. ELK represented that it intended to deliver “binding commitment letters prior to the expiration of the cure period” — that is, by March 21, 2012. A.R. 1821. On March 13, 2012, the SBA responded to ELK’s stated intention to deliver “binding commitment letters” as a cure for its condition of capital impairment. A.R. 1832. The SBA advised ELK that, “[a]t this time, [the] SBA cannot determine whether [the company’s] proposed cure [would] satisfactorily resolve [its] condition of Capital Impairment.” A.R. 1833. In particular, the SBA advised ELK that it would apply the guidance articulated in the SBA’s TechNote 13: Guidelines Concerning Debenture Applicants Structured as a Business Development Company or BDC Subsidiary (“TechNote 13”) “to determine whether binding commitments to [Ameritrans] will qualify as Regulatory Capital.” A.R. 1833. In this regard, the SBA noted that Ameritrans’ net worth was negative as of December 31, 2011, and on that basis stated that “it is likely that any [ ] commitments from [Ameritrans] to [ELK] will need to be funded to qualify as Regulatory Capital.” A.R. 1833. However, the SBA clearly stated that it could not, at that time, render a final decision, and instructed ELK to submit additional information, including “the fully executed binding commitment letters” and an “updated capital certificate.” A.R. 1833. ELK responded the following day, March 14, 2012, contending that the SBA’s had imposed “new and unreasonable conditions” in its latest correspondence. A.R. 1838, 1841. In its response, ELK took the position that TechNote 13 was inapplicable because it applies only to new applicants. A.R. 1839. Furthermore, ELK stated that it still intended to “provide binding commitment letters from qualified investors in an amount sufficient to cure [ELK’s]” condition of capital impairment, and further advised that “[t]he commitment letters will state that the entire amount of the investment will be invested into Ameritrans and then be immediately invested by Ameritrans into [ELK].” A.R. 1840. However, ELK offered the proviso that, “given that Ameritrans is a public company, the commitment Ietter[s] will provide that the commitments will be invested into Ameritrans immediately upon receipt of any shareholder approval that may be required prior to the investment,” though it claimed that “Ameritrans has the ability to lock-up approximately 45% of the voting shares, effectively insuring shareholder approval.” A.R. 1840. ELK concluded by unilaterally asserting that the SBA’s “March 13, 2012 letter effectively served as a modification of the March 6th letter and ‘reset’ the 15 day notice,” and asserted that it would “consider March 29, 2012, as the date required to cure the Capital Impairment.” A.R. 1844. On March 19, 2012, the SBA responded in turn, stating that “[t]he purpose of the SBA’s March 13, 2012 letter was to provide feedback on [ELK’s] proposed cure method so that [the company] did not pursue a cure that, in the end, would not be to SBA’s satisfaction.” A.R. 1846. The SBA took the position that it was not “imposing new requirements” on ELK, claiming that TechNote 13 “codified SBA’s policy in determining whether a parent business development company,” like Ameritrans, “qualified as an Institutional Investor.” A.R. 1846. The SBA noted that, because Ameritrans’ “net worth is negative as of December 31, 2011, it is likely that any commitments from [Ameritrans] to [ELK] will need to be funded to qualify as Regulatory Capital.” A.R. 1846. The SBA also observed that because ELK appeared to plan on conditioning the anticipated commitment letters on shareholder approval, they would “appear to be subject to a condition precedent making the commitment letters non-binding and thus not eligible to be counted towards Regulatory Capital.” A.R. 1846. Finally, the SBA rejected ELK’s unilateral interpretation of the agency’s March 13, 2012 letter, reaffirming that the cure period would expire on March 21, 2012. A.R. 1847. It is undisputed that ELK continues to have a condition of capital impairment. It is similarly undisputed that, to date, ELK has not submitted any binding commitment letters to the SBA for its consideration. C. Procedural History ELK commenced this action on March 20, 2012, seeking relief under the Administrative Procedure Act and the Due Process Clause of the Fifth Amendment to the United States Constitution for what it claims is the SBA’s arbitrary and capricious conduct. See Compl., ECF No. [1]. ELK filed its Motion for Preliminary Relief the same day. See Pl.’s Mem. in Supp. of Mot. for Prelim. Inj. & TRO (“Pl.’s Mem.”), ECF No. [3-2]. Upon receipt of ELK’s motion, the Court immediately contacted the parties in order to schedule further proceedings. At that point, the parties jointly represented that they had reached an agreement to suspend any liquidation activities involving ELK through and including April 5, 2012. See Min. Order (Mar. 20, 2012). The Court held an expedited in-person Scheduling Conference on March 21, 2012. ELK’s Complaint is prolix and disjointed, rattling off a litany of complaints about how the SBA has treated the company over the parties’ long relationship. Because this approach rendered it impossible to ascertain which of the SBA’s actions were actually at issue, a fair amount of the Court’s attention during the Scheduling Conference was directed towards attempting to get ELK to specifically identify the precise administrative action it intended to challenge in connection with its Motion for Preliminary Relief. See Tr. of Initial Scheduling Conf. at 13-19. In addition, during the Scheduling Conference, the parties represented that they had reached a further agreement to suspend any liquidation activities through and including April 25, 2012, preserving the status quo until then. See id. at 4-5, 28-29. On March 21, 2012, the Court set an expedited schedule for the briefing of ELK’s Motion for Preliminary Relief and denied without prejudice ELK’s Motion for Preliminary Relief insofar as it constituted a motion for a temporary restraining order, since ELK had already obtained the relief sought thereby through the SBA’s voluntary agreement. See Scheduling & Procedures Order (Mar. 21, 2012), ECF No. [7]; Order (Mar. 21, 2012), ECF No. [6]. Accordingly, ELK’s Motion for Preliminary Relief remains extant only insofar as it constitutes a motion for a preliminary injunction. Outside the scope of the Court’s schedule, and without prior leave of the Court, ELK filed a supplement to its Motion for Preliminary Relief on March 26, 2012. See Supplemental Aff. of Michael Feinsod, ECF No. [10]. On March 29, 2012, in accordance with the Court’s schedule, the SBA filed the certified Administrative Record. See ECF No. [13]. On April 2, 2012, the Court held an expedited on-the-record telephonic conference to discuss the parties’ dispute over the scope of the record and the SBA’s privilege log. During that conference, ELK clarified that, in connection with its Motion for Preliminary Relief, it is presently challenging only (1) the SBA’s decision to transfer ELK to the Office of SBIC Liquidation on February 22, 2012, and (2) the SBA’s Second Cure Letter dated March 6, 2012 and the conditions purportedly placed on the Second Cure Letter in the SBA’s letter dated March 13, 2012. See Tr. of Apr. 2, 2012 Telephone Conf. at 33-34, 50-51; see also Min. Order (Apr. 2, 2012) (memorializing the same). On April 5, 2012, consistent with the Court’s instructions during the April 2, 2012 conference, the SBA filed a small supplement to the Administrative Record. See ECF No. [16]. On April 9, 2012, the SBA filed its Opposition to ELK’s Motion for Preliminary Relief. See Def.’s Opp’n to Pl.’s Mot. for Prelim. Inj. (“Def.’s Opp’n”), ECF No. [18]. On April 11, 2011, the Court held an expedited on-the-record telephonic conference to resolve the parties’ dispute regarding certain items on the SBA’s privilege log. On April 12, 2012, ELK filed its Reply. See PL’s Reply Mem. in Supp. of Mot. for Prelim. Inj.'(“Pl.’s Reply”), ECF No. [22], On April 16, 2012, after carefully considering the parties’ submissions, the Court advised the parties that it would exercise its discretion to decide the motion on the papers and without hearing live testimony or oral argument. See Min. Order (Apr. 16, 2012) (citing LCvR 7(f); LCvR 65.1(d)). ELK’s Motion for Preliminary Relief is therefore fully briefed and ripe for adjudication. III. PRELIMINARY MATTERS As a threshold matter, SBA contends that this Court is precluded from granting ELK injunctive relief by virtue of 15 U.S.C. § 634(b)(1) (“Section 634(b)(1)”), which provides: In the performance of, and with respect to, the functions, powers, and duties vested in [her] by this chapter the Administrator [of the SBA] may ... sue and be sued ... in any United States district court, and jurisdiction is conferred upon such district court to determine such controversies without regard to the amount in controversy; but no attachment, injunction, garnishment, or other similar process, mesne or final, shall be issued against the Administrator or [her] property[.] 15 U.S.C. § 634(b)(1). Some courts have read the anti-injunction language in Section 634(b)(1) literally and concluded that injunctive relief against the SBA is absolutely foreclosed. See, e.g., J.C. Driskill, Inc. v. Abdnor, 901 F.2d 383, 386 (4th Cir.1990); Valley Constr. Co. v. Marsh, 714 F.2d 26, 29 (5th Cir.1983); Mar v. Kleppe, 520 F.2d 867, 869 (10th Cir.1975). Such a sweeping interpretation of Section 634(b)(1) has not taken hold in this Circuit, where courts have strongly intimated that injunctive relief is available, at a minimum, when the SBA exceeds its statutory authority. See Valley Forge Flag Co., Inc. v. Kleppe, 506 F.2d 243, 245 (D.C.Cir.1974) (per curiam); U.S. Women’s Chamber of Commerce v. U.S. Small Bus. Admin., 2005 WL 3244182, at *14 (D.D.C. Nov. 30, 2005); San Antonio Gen. Maint., Inc. v. Abdnor, 691 F.Supp. 1462, 1467 (D.D.C.1987). The question that remains is whether injunctive relief is available in a broader set of cases. The SBA contends, in essence, that so long as it has not clearly acted outside its statutory authority, no injunction may issue from this Court even if the SBA’s actions are arbitrary, capricious, or an abuse of discretion. In other words, SBA claims that injunctive relief is unavailable provided there is a colorable basis for concluding that the agency acted within its enumerated powers. Cf. OneSimpleLoan v. U.S. Sec’y of Educ., 2006 WL 1596768, at *5 (S.D.N.Y. June 9, 2006), aff'd, 496 F.3d 197 (2d Cir.2007), cert. denied, 552 U.S. 1180, 128 S.Ct. 1220, 170 L.Ed.2d 60 (2008). Is the availability of injunctive relief, as the SBA suggests, confined to those instances in which the SBA clearly exceeds its statutory authority? Or does it, as ELK suggests, also extend to those cases in which the SBA acts in a manner that is arbitrary, capricious, or an abuse of discretion under the Administrative Procedure Act? Unfortunately, the legislative history and case law relating to Section 634(b)(1) provide little guidance in answering these questions. The legislative history of Section 634(b)(1) itself is silent on the precise purpose behind the anti-injunction language chosen by Congress. See Ulstein Mar., Ltd. v. United States, 833 F.2d 1052, 1056-57 (1st Cir.1987); Related Indus., Inc. v. United States, 2 Cl.Ct. 517, 522 (Ct.C1.1983). However, the same anti-injunction language is frequently found in statutes defining the powers of agencies that provide loans or funds to the public. See, e.g., 7 U.S.C. § 1506(d); 15 U.S.C. § 714b(c); 42 U.S.C. § 3211(13). The legislative history of those statutes suggests that Congress intended the anti-injunction language “to keep creditors and others suing the government from hindering and obstructing agency operations through mechanisms such as attachments of funds.” Ulstein, 833 F.2d at 1056-57. Meanwhile, there is no authority from this Circuit standing for the proposition that an injunction may issue consistent with Section 634(b)(1) when the agency has acted within the scope of its statutory authority, but has exercised its authority in a manner that is arbitrary, capricious, or an abuse of discretion. But see Oklahoma Aerotronics, Inc. v. United States, 661 F.2d 976, 977 (D.C.Cir.1981) (per curiam) (rejecting the SBA’s unidentified “arguments about sovereign immunity and injunctive relief [as] irrelevant” and providing that a “court may hold unlawful and set aside agency action that is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law’ ”) (quoting 5 U.S.C. § 706(2)(A)). But neither is there any authority standing for the opposite proposition. In short, neither the legislative history nor case law provides a ready answer to the question of how Section 634(b)(1) applies in this case. In interpreting Section 634(b)(1), this Court must be guided by the United States Supreme Court’s instruction that “such sue-and-be-sued waivers are to be liberally construed, notwithstanding the general rule that waivers of sovereign immunity are to be read narrowly in favor the sovereign.” Fed. Deposit Ins. Corp. v. Meyer, 510 U.S. 471, 480, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994) (internal quotations marks and citation omitted); see also Fed. Housing Admin., Region No. 4 v. Burr, 309 U.S. 242, 245, 60 S.Ct. 488, 84 L.Ed. 724 (1940). For this reason, the idea of construing Section 634(b)(1) to grant the SBA any greater immunity from injunctive relief under the Administrative Procedure Act than is enjoyed by other federal agencies gives this Court pause. Cf. Cavalier Clothes, Inc. v. United States, 810 F.2d 1108, 1112 (Fed.Cir.1987) (“[Njothing either in the language or legislative history of § 634 suggests that Congress intended to grant the SBA any greater immunity from injunctive relief than that possessed by other governmental agencies.”). At the same time, the Court harbors some concern that the specific injunctive relief sought by ELK in this case could implicate the sort of interference with “the agency’s assets” that other courts have suggested falls within the ambit of Section 634(b)(1)’s anti-injunction language. Ulstein, 833 F.2d at 1056. Ultimately, the Court need not resolve these difficult questions about the scope of Section 634(b)(1) and its application to this case. For the reasons set forth below, even assuming the availability of injunctive relief as a hypothetical matter, the Court concludes that ELK has failed to satisfy the traditional four-part test for a preliminary injunction. IV. LEGAL STANDARD A preliminary injunction is “an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 21, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008). A plaintiff seeking a preliminary injunction must establish that (1) it is likely to succeed on the merits, (2) it is likely to suffer irreparable harm in the absence of preliminary relief, (3) the balance of the equities tips in its favor, and (4) an injunction would be in the public interest. Id. at 20, 129 S.Ct. 365. Historically, these four factors have been evaluated on a “sliding scale” in this Circuit, such that a stronger showing on one factor could make up for a weaker showing on another. See Davenport v. Int’l Bhd. of Teamsters, 166 F.3d 356, 360-61 (D.C.Cir.1999). Recently, the continued viability of that approach has been called into some doubt, as the United States Court of Appeals for the District of Columbia Circuit has suggested, without holding, that a likelihood of success on the merits is an independent, free-standing requirement for a preliminary injunction. See Sherley v. Sebelius, 644 F.3d 388, 392-93 (D.C.Cir.2011); Davis v. Pension Benefit Guar. Corp., 571 F.3d 1288, 1292 (D.C.Cir.2009). However, absent binding authority or clear guidance from the Court of Appeals, the Court considers the most prudent course to bypass this unresolved issue and proceed to explain why a preliminary injunction is not appropriate under the “sliding scale” framework. If a plaintiff cannot meet the less demanding “sliding scale” standard, then it cannot satisfy the more stringent standard alluded to by the Court of Appeals. V. DISCUSSION Through its Motion for Preliminary Relief, ELK seeks a preliminary injunction: (1) Requiring the SBA to issue ELK a right to cure letter presenting ELK with a “commercially reasonable” period to present commitment letters reflecting funds to bring its capital impairment percentage to 40% or lower; (2) Suspending any liquidation activities by the Office of SBIC Liquidation during the pendency of this action; (3) Enjoining the SBA from taking any action that would affect ELK’s status as an SBIC licensee; and (4) Commanding the SBA to issue a public statement, or allowing ELK to represent to investors, that the SBA will not accelerate ELK’s obligations on its debentures. Considering the record as a whole, the Court finds that ELK has failed to make a “clear showing” that it is entitled to the “extraordinary relief’ of a preliminary injunction. Winter, 555 U.S. at 21, 129 S.Ct. 365. Accordingly, ELK’s Motion for Preliminary Relief shall be DENIED. A. Likelihood of Success on the Meri