EB-5 Redeployment Transactions
on the Defense: Lawsuits, Breach of
Fiduciary Duty Claims and
Consent Issues
Steps new commercial enterprises can take to try to avoid
potential litigation when redeployment is inevitable.
By Ronald Fieldstone, Rohit Kapuria and Catherine DeBono Holmes
R
edeployment has become a major component of the
EB-5 program given the significant retrogression that has
occurred in China, as well as the more recent retrogression in
India and Vietnam. Due to long time delays in the EB-5 visa
process, it is now common that the proceeds of repayment of
the original loan or equity capital invested in an EB-5 project
are required to be maintained at-risk pursuant to the June 14,
2017 USCIS Policy Memorandum.
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EB5 INVESTORS M AGAZINE
There are many options for a new commercial enterprise (NCE)
to navigate this critical area and select appropriate solutions
to mitigate the risk of litigation or claims brought by unhappy
EB-5 investors. Usually, the obligation to redeploy in a manner
that will satisfy both the financial and immigration goals of
the EB-5 investors rests with the general partner/manager
of the NCE. In many cases, the general partner/manager of
the NCE has conflicts of interest in making the redeployment
investment selection, either because the general partner/