who have withdrawn a right to receive a return of their
capital from the repayment proceeds. Offering this ability
to withdraw capital if an EB-5 investor has withdrawn from
the visa process provides every EB-5 investor with some
degree of control over their investment, which can assist in
retaining the confidence of EB-5 investors in the fairness of
the general partner/manager of the NCE.
Review the EB-5 fund distribution provisions and modify
if necessary to allow for staggered payments to EB-5
investors
The partnership agreement or operating agreement of
many NCEs contemplated a single repayment event for
all EB-5 investors. However, because of the lengthy time
delays for those investors subject to retrogression, it is
likely that some EB-5 investors will qualify for repayment of
their capital earlier than others. However, the NCE cannot
make earlier payments to some EB-5 investors unless
their agreement allows them to do so. In that case, the
NCE should consider an amendment to its partnership
agreement or operating agreement allowing for repayment
of eligible EB-5 investors when the NCE have available
proceeds from each investment.
Following best practices for redeployment should protect
EB-5 investors and reduce litigation risks for EB-5
sponsors
The EB-5 reinvestment requirement imposed by USCIS
has resulted in EB-5 investors having reasonable concerns
about the manner in which their capital is being reinvested.
EB-5 fund sponsors must appropriately address these
concerns to fulfill their duties to the EB-5 investors, and
thereby mitigate the potential risks of litigation. Using the
above redeployment practices will protect the interests
of EB-5 investors and help EB-5 fund sponsors to avoid
potential litigation risks associated with reinvestment.
14
EB5 INVESTORS M AGAZINE
Ronald Fieldstone,
chair of Saul
Ew i n g A r n s t e i n & L e h r L L P ’s G l o b a l
Immigration and Foreign Investment Group
and head of the firm’s Opportunity Zone
Group, practices primarily in the areas of
corporate/securities and taxation law.
Fieldstone has been serving as corporate/
securities counsel for multifaceted
industries involving EB-5 immigrant visa
investor offerings. He represents developers
and regional centers in EB-5 matters,
currently handling more than 350 EB-5 projects with combined
capital raise of nearly $8 billion. He prepares private placement
memoranda and related documents. Fieldstone frequently lectures
and publishes about the subject of EB-5 corporate/securities. He
obtained his bachelor’s, MBA and Juris Doctor from the University
of Pennsylvania.
Rohit Kapuria, an attorney at Saul
Ewing Arnstein & Lehr LLP, regularly
represents EB-5 lenders, borrowers, banks,
regional centers, real estate developers and
migration brokers. Kapuria’s practice is a
dual hybrid of corporate securities and EB-5
immigration law. He has worked on over
500 EB-5 transactions, with a combined
capital development cost in excess of $7.5
billion. Kapuria currently represents close
to 25% of the Indian -born EB-5 investor
market. He is also very active in Opportunity Zones, representing
clients around the U.S. in such transactions. Kapuria is fluent in
Hindi, Urdu, Punjabi and Hausa.
Catherine DeBono Holmes is the
chair of JMBM’s Investment Capital Law
Group. She helps real estate developers
and business owners, brokers, investment
advisers and investment managers raise
and manage investment capital from U.S.
and non-U.S. investors. She has represented
hundreds of EB-5 offering sponsors and
real estate developers to obtain financing
for the development of hotels, multi-
family, assisted living and mixed-use
developments throughout the U.S. She also represents private
investment fund managers, registered securities broker-dealers and
investment advisers on securities offerings, business transactions
and regulatory compliance issues.