For the past decade, real estate developers have increasingly used EB-5 loans to finance their projects. For the reasons discussed below, these investments are defaulting at a high rate, a trend that may increase if the luxury residential and hotel markets continue to soften.

EB-5 defaults give rise to a unique set of issues, which complicate the restructuring process. This practice note briefly describes the EB-5 program, outlines some of those unique issues, and provides some tips for insolvency professionals new to this type of restructuring, including a discussion of:

  • What Is the EB-5 Program?
  • Successes and Failures of EB-5 Projects
  • Unique Considerations for EB-5 Projects in Distress
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