TOP CORPORATE AT TORNEYS
JOHN TISHLER
SHEPPARD MULLIN | PARTNER
John Tishler practices corporate
and securities law as a partner
at Sheppard Mullin, a global law
firm. He is leader of the EB-5
project finance practice and has
served from time to time as leader of the public companies and
capital markets group. Tishler’s practice includes domestic
and international capital markets, corporate finance, corporate
governance, business transactions, mergers and acquisitions
and technology. For more than 25 years, Tishler has helped
clients in designing and executing successful investment
programs. He represents developers, regional centers and
other intermediaries for their participation in the EB-5 program.
Tishler is a leading EB-5 securities and project finance attorney.
WHAT TRENDS ARE YOU SEEING
IN THE EB-5 INDUSTRY?
Deals must now be designed to sell in markets other than China.
Different markets have different investor expectations and
different marketing needs. Common to all of them is that investors
and migration agents are increasingly sophisticated about project
selection and credit quality. For example, most investors no longer
accept the risk associated with a project that depends on EB-5
funds for completion. We are therefore seeing almost all deals
structured as repayment of bridge capital as USCIS guidance
permits. For deals that were completed in the past, we are seeing
an increasing number of disputes associated with EB-5 financing.
HOW ARE YOU HANDLING
THE ISSUE OF REDEPLOYMENT?
Our firm has always included redeployment planning for EB-5
clients. We believe the USCIS requirement to keep investments
at-risk through the investors’ sustainment periods increases
EB-5 capital’s value to the users of that capital and helps offset
the high upfront costs of the capital. Without available
redeployment into other projects, many developers would pass
on EB-5. Of course, redeployment presents risks – which is
exactly the point, as USCIS requires redeployed funds be at-
risk. Migration agents are negotiating redeployment as part of
project underwriting. Redeployment requires balancing the
interests of investors, intermediaries and developers in the
face of regulatory uncertainty.
OSVALDO F. TORRES
TORRES LAW, P.A. | SHAREHOLDER
Osvaldo F. Torres graduated
from the University of
Pennsylvania Law School
in 1987. During his 30 -year
career, Torres has prepared
offering documents for a
variety of projects. For the past eight years, Torres has
been immersed in the EB-5 space. He regularly represents
regional centers, developers and projects with their
structuring and offering matters, including hotel, multi-
family, senior living, franchising and other projects. Torres
frequently speaks at EB-5 conferences on securities issues.
He is a member of the EB-5 SEC Roundtable, serves on
IIUSA’s leadership, public policy and editorial committees,
and is rated AV Preeminent by Martindale-Hubbell.
WHAT TRENDS ARE YOU SEEING
IN THE EB-5 INDUSTRY?
Considering the visa backlog impacting mainland Chinese
investors, we have seen more of our clients having to deal
with investor withdrawals. As investor patience wanes due
to the backlog, issuers are facing increasing pressure from
investors to release them from the projects and return
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EB5 INVESTORS M AGAZINE
investor funds. In most cases, the relevant agreements
simply do not provide for a voluntary investor withdrawal.
We nonetheless spend significant time preparing and
negotiating withdrawal agreements on behalf of our
corporate clients. We have also seen more individual
investors engaging with us on this issue. This trend will
continue, and pressure will mount over time.
HOW ARE YOU HANDLING
THE ISSUE OF REDEPLOYMENT?
We address redeployment issues daily. It is a byproduct of
mainland Chinese investor visa backlog. This is a complex
issue and poor USCIS guidance is not helpful. We started to
insert redeployment provisions giving the GP/manager the
power to make redeployment decisions into our offering
documents in 2014-2015. That foresight has helped us on
several deals because we can generally obviate the need to
seek investor consent. We are currently negotiating several
redeployment matters involving sophisticated developers.
The uncertainty in this area creates client discomfort and
investor concern about how their funds will be “reused” and
their immigration benefit preserved.