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How should investors negotiate redeployment if no clauses regarding this is mentioned in the private placement memorandum?

As a China-born EB-5 investor, I have been waiting in the backlog for more than four years. My kid has aged out and there is no point for us to keep doing this. As our initial loan to the regional center is about to mature, we are thinking about quitting EB-5 and getting the $500,000 back instead of redeploying it to another project. I studied the private placement memorandum and there are no clauses explaining redeployment situations or withdrawal of investment capital upon redeployment. In this case, how should the investor negotiate with the regional center in order to avoid unnecessary legal obligations or liabilities? What are some key points that we need to be careful about?

Answers

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    BoBi Ahn

    Immigration Attorney
    Answered on

    May be advisable to discuss this with your attorney and have him/her review the PPM for the "exit strategy" if he/she has not already gone over that with you before the investment.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    It appears your offering documents were drafted prior to redeployment issues that arise presently due to extreme immigrant visa backlogs that affect EB-5 investors. Best practice would be to hire an experienced EB-5 corporate law attorney to help you negotiate your exit from the regional center project.

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    Russell C Weigel, III

    Securities Attorney
    Answered on

    Regrettably, an attorney would need additional details and the ability to review the actual terms of your investment before responding with potential options for you. That communication should be conducted privately between attorney and client for your protection.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    Since redeployment was not contemplated four years ago when the private placement memorandums were being drafted for many of the regional center projects, this is not an uncommon scenario. Most of the reputable regional centers will give the limited partners an opportunity to opt out of the partnership when the loan maturity and pay-out date approaches, which will allow you to opt out of the partnership and get your money back. However, not all the regional centers will operate this way and you will have to have a serious discussion/negotiation with the regional center. Please note that you may not be able to avoid a lawsuit if the regional center does not want to work with you.

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    Sarah Xiao Qian Mu

    Immigration Attorney
    Answered on

    A corporate attorney should review the legal documents and can provide advice regarding your question.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    The issue you raise is becoming more prevalent as waiting times for China-born investors have reached unmanageable levels. To protect your rights and your investment capital, you should engage an attorney who is experienced in EB-5 matters and especially in EB-5 exit and recovery services. The attorney will be able to review all of the documents you signed with the EB-5 project and advise you on your options, both legally and practically. The attorney also can represent you in negotiations with the regional center so that your interests are protected.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    You should hire a professional to help review your particularly loan documents. I would start with a friendly call to explain you do not wish to continue the application and since the loan has matured you would like to cancel your application and have the funds returned.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    It is advisable you seek a withdrawal of the petition. However, you will still need to rely on the private placement memorandum in question. Otherwise, seek a negotiated arrangement with the regional center. Do not rule the possibility of engaging the services of an attorney to get through the process.

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    Charles Foster

    Immigration Attorney
    Answered on

    If in fact you do not wish to maintain your lawful permanent residency in the U.S., given your option of acquiring lawful permanent residency in the United States based upon your current EB-5 investment, given the backlog for Chinese nationals under the quota and the terms of your investment have been met and there are no redeployment clauses, nor a need to redeploy given your desire not to pursue lawful permanent residency, through you attorney or otherwise, you should simply advise the appropriate parties with the regional center and job-creating entity that, per the terms of your original investment, you wish to recoup your investment plus interest and there is no need for them to redeploy your capital, given the fact that you are not pursuing your option to obtain lawful permanent residency.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    It sounds like your PPM was drafted well before the concept of redeployment was announced. If there were no addenda or amendments to the documents, your project may not have any provisions in place, leaving you with only the still partially developed USCIS policies. I would want to look at the documents themselves to see what the early repayment processes are. Often, regional centers will not return funds just because the investor wants them back, but again, I would want to look at those docs.

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