EB5 Investors Magazine "Top 25 Awards Edition" Volume 8 Issue 1 - Page 48

TOP CORPORATE AT TORNEYS DEBBIE KLIS D ebbie Klis is a Partner with Rimon Law where she represents private investment funds and investment advisers in connection with fund structuring, advertising, private placement procedures, compliance policies and procedures, side letters, placement contracts, related agreements and issues. Klis’s experience includes private equity funds, EB-5 funds, venture capital funds, complex partnerships, domestic/offshore hedge funds, and Opportunity Zone Funds. Klis has extensive experience with private securities offerings, Environmental, Social, and Governance (ESG) investment policies and practices and anti-money laundering regimes and operations. Klis is a graduate of Georgetown University, L.L.M., Taxation; Golden Gate University, J.D.; and Santa Clara University, B.S. WHAT TRENDS ARE YOU SEEING IN THE EB-5 INDUSTRY? After the legal uncertainties with the EB-5 program stifled investment in 2019 and the pandemic caused a standstill to the EB-5 program in 2020, 2021 is shaping up to be a year of EB-5 JOR LAW J or Law is a founding shareholder of Lexcuity PC which he led to become a dominant firm in EB-5 and other areas of alternative finance such as crowdfunding, blockchain, and digital assets tokenization, including through ICOs/STOs. Law has gone on to represent clients on hundreds of different EB-5 matters, help companies and projects successfully raise billions of dollars through the EB-5 program. He is constantly at the forefront of EB-5, providing solutions to problems before they are identified by the industry and introducing new concepts such as crowdfunding, tokenization, and secondary trading of EB-5 interests through cryptocurrency infrastructure. WHAT TRENDS ARE YOU SEEING IN THE EB-5 INDUSTRY? There is an uptick in litigation from investors that have completed the EB-5 process but failed to exit their investment. Plaintiff firms are actively seeking investors to initiate claims against projects. They tend to be more focused on breach of contract 48 EB5 INVESTORS MAGAZINE CORPORATE ATTORNEYS EB5 INVESTORS MAGAZINE industry resurrection, even if it is modest. Already, we are seeing interest in China and India in 2021, perhaps fueled by perceived decreases to the backlog as well as the energy created by the proposed EB-5 Reform and Integrity Act. The EB-5 program has faced uncertainty since 2015 so the prospect of a five-year renewal through 2026 and greater transparency and reliability may turn this important program around. HOW ARE YOU HANDLING THE ISSUE OF REDEPLOYMENT? We have guided clients to redeploy EB-5 capital using available USCIS formal and informal policy, and sound corporate and securities law principals. In the absence of guidance otherwise, we assumed that redeployment was permitted anywhere in the U.S. and it could occur through the NCE or the JCE. USCIS July 2020 Policy Alert was disruptive indeed. Retroactive application of clarifying guidance is usually problematic when it veers from previous pronouncements. The 12-month redeployment window was more the generous, but we would have preferred liberties to redeploy, following sufficient creation, in any sound real estate project that maintains risk despite the location and how it was structured. CORPORATE ATTORNEYS EB5 INVESTORS MAGAZINE claims rather than securities claims. Additionally, as crypto becomes an accepted asset class, more investors may attempt to rely on crypto assets for investments. As EB-5 deals mature and investors seek liquidity, the use of blockchain technology and security token techniques provides an interesting avenue toward potential liquidity. HOW ARE YOU HANDLING THE ISSUE OF REDEPLOYMENT? From a corporate/securities law perspective, it’s about providing issuers with maximum flexibility and liability protection while respecting investors’ interests in having redeployment options that adequately align with their varying investment objectives. Interim or alternative use of funds is a concept that already existed in funds predating EB-5, so our firm’s original forms already had provisions addressing redeployment. Additionally, it may be necessary to structure around investment adviser and similar laws or partner with appropriately licensed persons. Proper disclosure of material facts and risks affecting redeployment generally as well as a specific project’s redeployment plan is a must.