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Concurrent Reg S and Reg D Offerings

Posted by Kurt Reuss on June 17, 2016

EB5 Business plan

Kurt: Let's talk about what I find to be the most complicated part of 506(c) and squaring it with Reg S, and that is the issue of concurrent offerings. It seems to me that if you're trying to do a Reg D offering at the same time you're doing a Reg S offering, those two objectives compete with each other.

Let’s say you're doing a general solicitation under 506(c) and simultaniously under Reg S you can't have any contact with people in the US. How can you do a concurrent offering of both Reg S and Reg D?

Crowdfunding Defined Under Titles II, III and IV

Posted by Kurt Reuss on June 15, 2016

Kurt: When we look at crowdfunding in eb5 process; we're talking about three rules: Title II, Title III and Title IV.

Title IV, being Reg A+ investment offerings, requires you to register your securities with the SEC, so that's going to bring more responsibility on you.

Title III involves raising no more than $1 million.

So my sense is that Title II, Reg D - Rule 506(c) is probably most applicable to EB-5.

EB-5 Business Plan Process, from Start to Offering

Posted by Kurt Reuss on March 22, 2016

Kurt: How long does it take from the time someone wants to start putting an EB 5 investment projects together, to completing it and being ready to take the offering to market?

Lets say from the time they meet with an immigration attorney to the time they should expect to have completed putting together the offering package?

Martin, could you walk us through the process? My sense is that the immigration attorney typically acts as the quarterback on EB-5 offering package . How do you see your firm's role?

Martin: As precisely that; we're the quarterback. We pull together a team which we think will be suitable for the project. That team might include a business plan writer, an economist and a securities lawyer. We also work with the client, their accountant and their business lawyer.

We usually have a kickoff call with everybody to assign tasks so everyone gets to know each other. Everybody will send out a questionnaire to the developer and we try to go through them so that there's not a lot of overlap. Then, we make sure that people are meeting their schedules to produce what they need.

What is an EB5 Inter-Creditor Agreement?

Posted by Kurt Reuss on June 05, 2015

Inter-Creditor Agreement in concern with EB5 Projects

(Michael Gibson): Generally an intercreditor agreement just defines the terms of the relationship between a senior and a subordinate lender in a transaction. Sometimes if there are multiple lenders in the senior pool you'll see agreements between those lenders as well. With respect to EB5 intercreditor agreements, the EB5 capital is going to be in a subordinate position. 

The first question to ask yourself is whether you need an intercreditor agreement. Intercreditor agreements are often not very favorable to a subordinate lender. The terms may stipulate that if there is a default under the senior loan, the subordinate lender will be asked to do things like forego rights to collect interest or principal payments, to standstill on exercising remedies, or to give up certain rights in a bankruptcy action including rights to object that a subordinate lender would otherwise have including rights to approve certain aspects of a bankruptcy plan. In general, in a subordinate position, the first thing you want to ask yourself is, do I really want an intercreditor agreement?