EB5 INVESTORS M AGAZINE
12
REDEPLOYMENT
by USCIS. In addition, each EB-5 investor who notifies
the EB-5 fund that he or she has withdrawn or desires
to withdraw his or her I-526 petition should be required
to provide evidence of withdrawal in order to receive the
refund. Providing EB-5 investors who have withdrawn
or desire to withdraw their visa petitions an opportunity
to receive repayment prior to reinvestment is one of
the most important ways for EB-5 sponsors to avoid
potential litigation with EB-5 investors.
REVIEW THE EB-5 FUND DISTRIBUTION PROVISIONS
AND MODIFY, IF NECESSARY, TO ALLOW FOR
STAGGERED PAYMENTS TO EB-5 INVESTORS
Because of the long waiting periods that may be
experienced by some EB-5 investors, it has become
necessary to restructure EB-5 funds to allow for
distributions of capital to be made to individual EB-5
investors at different times, rather than to all EB-5
investors at once. However, if the EB-5 fund partnership
or operating agreement does not allow for that method
of distribution, the EB-5 fund manager could be subject
to litigation for making distributions that are not in
accordance with the fund’s governing agreement.
Therefore, as part of the reinvestment process, the EB-5
fund manager should consider whether an amendment
should be made to the fund’s governing agreement to
allow for repayment of capital to each EB-5 investor who
is eligible for repayment from the proceeds of repayment
of each investment and reinvestment, as well as whether
investor consent is required in connection with same.
FOLLOWING BEST PRACTICES FOR REDEPLOYMENT
SHOULD PROTECT EB-5 INVESTORS & 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
i s b e i ng re i nve ste d. EB-5 f u nd sp on s or s mu st
appropriately address these concerns to fulfill their
duties to the EB-5 investors, thereby mitigating the
potential risks of litigation.
C atherine D e B ono H olmes
is the chair of JMBM’s
investment capital law group. She has practiced law at JMBM for
over 35 years. Holmes helps real estate developers and business
owners, brokers, investment advisers and investment managers
raise and manage investment capital from investors. In the last
10 years, she has represented over 100 real estate developers
obtain financing through the EB-5 program. She also advises
Opportunity Zone investments. For the last two years, she was
named one of the top 25 securities lawyers in the country by EB5
Investors Magazine.
R onald R. F ieldstone
currently practices primarily in
the areas of corporate/securities, real estate and taxation law.
Since 2009, Fieldstone has served as counsel for multifaceted
industries involving EB-5 program offerings, including more than
350 EB-5 projects with a combined projected capital raise in
excess of $8 billion. Fieldstone frequently lectures and publishes
in the EB-5 industry. He is also a professional advisor in the
Opportunity Zone industry. Fieldstone received his undergraduate
degree, MBA and J.D. from the University of Pennsylvania.