With approximately $15 billion in pre-2022 EB-5 capital still deployed and evolving regulations, these cases present unique challenges blending contract interpretation, duty of loyalty violations and immigration consequences.

In the September 10, edition of The Legal Intelligencer, Edward Kang and Kyle Garabedian co-authored, “Redeployed and Reluctant: Litigating EB-5 Sponsors’ Reinvestment of Investor Capital.”

Recently, this column examined the litigation strategies available to EB-5 investors seeking to recover their capital from failed or fraudulent projects. This month, we turn to a rapidly growing subset of those disputes: litigation arising from the “redeployment” of EB-5 investor capital. In a redeployment, the sponsor of an EB-5 investment vehicle, typically the general partner or manager of the New Commercial Enterprise (NCE), reinvests capital returned by the original project in a new venture, often without the investors’ meaningful input and sometimes over their express objection. For investors who expected the return of their capital, redeployment can feel like a second investment they never agreed to make. For plaintiffs counsel, these disputes present a distinctive blend of contract interpretation, fiduciary duty law, securities regulation, and immigration strategy.