Your EB-5 loan was repaid early, your green card is still years away, and the fund moved your money into a project that looks worse than the first one. For investors who still have to keep their money at risk, immigration rules require that redeployment. The redeployment statute itself does not mention investor lawsuits, and the cases below were brought under state law, several of them under the funds’ own agreements.
This post is part of Rosenberger + Kawabata’s series on EB-5 investor lawsuits.
Why does an EB-5 fund redeploy your money?
The fund you bought into is the new commercial enterprise, or NCE, which the statute says can be a limited partnership. The business that borrows the money and creates the jobs is the job-creating entity, or JCE. The general partner, or GP, runs the NCE. Redeployment means the fund takes money the JCE paid back and invests it again.
The reason is the “at risk” rule. According to USCIS’s EB-5 questions and answers, “investors who filed Form I-526 petitions before the RIA must sustain their investment throughout the 2-year period of their conditional residence.” (The RIA is the EB-5 Reform and Integrity Act of 2022.) USCIS’s Policy Manual lets the fund “further deploy” repaid capital to keep it at risk.
For later filers, the statute asks whether the capital is “expected to remain invested for not less than 2 years” (8 U.S.C. § 1153(b)(5)(A)(i)). USCIS reads that two-year clock as starting when the full investment is placed at risk.
In a 2026 rulemaking notice, the Department of Homeland Security wrote that “regional center investors have had the longest wait for an immigrant visa and have been most impacted by the need to further deploy capital to retain eligibility” (91 Fed. Reg. 40676, 40698).
What do the redeployment rules actually say?
Congress wrote redeployment into the statute in the RIA (Pub. L. 117-103, div. BB). The provision, 8 U.S.C. § 1153(b)(5)(F)(v), lets an NCE move investor money “anywhere within the United States or its territories” to keep the investors’ capital at risk. It lists four conditions, and USCIS applies them to regional center petitions filed on or after May 14, 2022. The NCE must have carried out its business plan in good faith without a material change. Enough jobs must exist for every investor. The JCE must have repaid the money as the business plan contemplated. And the capital must stay at risk, not parked “in passive investments, such as stocks or bonds.” Earlier investors fall under USCIS’s general further-deployment guidance, which still requires that the job creation requirement has been met and that the money go into commercial activity consistent with the NCE’s purpose.
In its 2026 proposal, DHS wrote (91 Fed. Reg. at 40723) that “Current regulations do not address” what happens when a project returns investor capital early, and that USCIS has handled the issue through its Policy Manual (91 Fed. Reg. 40676). As of October 2026, that guidance let the NCE redeploy “within a reasonable amount of time.” A footnote added that USCIS “generally considers 12 months to be a reasonable amount of time to further deploy capital for most types of commercial enterprises.” In July 2026, DHS proposed regulations that would require redeployment within 3 months of the capital’s return to the NCE, unless a longer period is shown to be reasonable. As of October 2026, no final rule had issued.
If an NCE breaks the conditions, the statute directs DHS to “terminate the designation of a regional center.” The provision does not mention lawsuits by investors.
What happened when investors challenged a redeployment in court?
In a 2025 North Carolina Business Court case (2025 NCBC 46), according to the investors’ complaint, 151 Chinese nationals invested $500,000 each, a total of $75,500,000, in a North Carolina limited partnership. The partnership lent the money to a sawmill, the sawmill filed for bankruptcy in 2020, and in March 2023 the sawmill’s liquidating trust paid $31,500,000 back to the partnership.
Some investors still needed their capital at risk while others wanted a distribution, so the money had to be split, and 33 of the limited partners intervened in the dispute. According to their complaint, the 12-month window under USCIS guidance called for “a careful and deliberative process” to decide how much to reinvest and where.
The complaint alleges that the GP instead signed a $16.4 million promissory note to a startup that, according to the complaint, was incorporated in January 2024 and had no track record and no revenue. The investors also alleged that the partnership’s professional manager refused to carry out the plan, calling it “a startup in need of seed money in a risky industry sector.” They alleged that the GP’s EB-5 immigration counsel agreed the investment was improper and that the GP signed the note anyway, without limited-partner approval.
On August 15, 2025, the North Carolina Business Court refused to dismiss the fiduciary-duty and partnership-agreement claims against the GP. It held that the investors “alleged sufficient non-conclusory facts” that the GP “was inattentive or uninformed, acted in bad faith, or that the board’s decision was unreasonable.” It dismissed the fiduciary claims against the individual managers with prejudice and kept alive the request for a receiver.
As of the court’s August 2025 rulings, the case was at the pleading stage, and the court had made no findings of wrongdoing.
What have courts found in disputes over repaid EB-5 capital?
In a 2025 Delaware Court of Chancery decision (C.A. No. 2022-0768-JTL), the court, in its post-trial findings, described how the controller of a regional center handled repaid infrastructure loans. He pooled the returned EB-5 capital in a new vehicle and had it lend $233 million to an entity he owned 68% of to buy a Philadelphia luxury residential building. The loan ran ten years at a fixed 4% interest rate with no principal due until maturity. The court wrote: “The loan was obviously a self-interested transaction.”
No EB-5 investor was a party to that case, which was a dispute between insiders. The $6,898,612 award compensated a minority owner whose ownership stakes the controller eliminated, and it did not rest on the loan. The Delaware Supreme Court (No. 19, 2026) reversed a separate attorneys’ fee award in August 2026, otherwise affirmed, and sent the case back.
In a 2019 Delaware Court of Chancery decision (C.A. No. 2018-0240-JRS), 200 Chinese investors had funded a $100 million construction loan for a downtown Los Angeles tower. According to the court’s post-trial findings, the developer’s CFO offered to repay early, “with the implicit understanding that freed capital could be redeployed as a loan to fund another [developer] project.” After the prepayment plan failed, the court found, members “influenced by” the developer removed the fund’s manager. The court held the removal was without cause and reinstated the manager, and the Delaware Supreme Court affirmed.
Can the fund’s agreement waive the manager’s duties?
California law keeps a floor. A California limited partnership agreement cannot “Eliminate the duty of loyalty,” cannot “Unreasonably reduce the duty of care,” and cannot eliminate the obligation of good faith and fair dealing (Cal. Corp. Code § 15901.10(b)(5)–(7)). The LLC rule is broader: a California operating agreement cannot eliminate “the duty of loyalty, the duty of care, or any other fiduciary duty,” and a manager’s duties can be changed only in a written agreement with the members’ informed consent (§ 17701.10).
The funds in the sawmill case and the Los Angeles tower case were organized in North Carolina and Delaware. California’s own statutes send a court to the law of the state where the fund was formed for the partners’ internal relations (§ 15909.01 for partnerships, § 17708.01 for LLCs).
Delaware lets a partnership agreement restrict or eliminate fiduciary duties. The one thing it cannot remove is “the implied contractual covenant of good faith and fair dealing” (6 Del. C. § 17-1101(d)). An agreement also cannot excuse “a bad faith violation” of that covenant (§ 17-1101(f)).
California’s securities law has its own anti-waiver rule. It voids any provision that makes an investor “waive compliance” with it (Corp. Code § 25701). In a 1983 California Court of Appeal decision (150 Cal.App.3d 411), California residents traded their limited-partnership interests for stock, and the Court of Appeal held a Nevada choice-of-law clause in that deal void under the statute and refused to enforce the companion forum clause. The court explained that section 25701 “applies where there is an offer to sell or buy securities in California.”
Frequently asked questions
Doesn’t EB-5 money have to be at risk anyway?
Yes. USCIS’s Policy Manual says, “For the capital to be at risk, there must be a risk of loss and a chance for gain.” In the sawmill case, the court asked whether the investors had alleged that the GP “was inattentive or uninformed, acted in bad faith, or that the board’s decision was unreasonable.”
Can one investor sue alone?
In a 2023 North Carolina Business Court decision (2023 NCBC 47), the court dismissed EB-5 investors’ direct fiduciary claim against the GP because the alleged harm fell on the partnership as a whole. The court explained that under North Carolina law “one partner may not sue in his own name, and for his benefit, upon a cause of action in favor of a partnership,” subject to two exceptions. In the sawmill case, the court held the intervening investors had sufficiently alleged why they did not first demand that the GP sue.
How long does the fund have to redeploy?
As of October 2026, USCIS guidance said 12 months is generally reasonable. The July 2026 DHS proposal would require redeployment within 3 months, unless a longer period is shown to be reasonable, and DHS wrote that it “proposes to limit redeployment to regional center investors” (91 Fed. Reg. at 40698). As of October 2026, no final rule had issued.
What to do now
- Gather the offering documents: the private placement memorandum, subscription agreement, and partnership or operating agreement, plus any translations you received.
- Find every notice about the repayment and redeployment.
- Save the marketing materials and every message from your migration agent.
- Write down what you were told about the new investment, by whom, and when.
- Keep your annual statements and fund-administrator reports.
- Talk to your immigration counsel about I-526 or I-829 effects, and consult a securities lawyer promptly.
Rosenberger + Kawabata does not give immigration advice. Before taking legal action, talk with your immigration attorney about how a lawsuit or a recovery could affect a pending I-526 or I-829 petition.
See also the posts on EB-5 foreclosures and regional center due diligence.
Rosenberger + Kawabata represents investors in securities fraud and investment loss cases, including claims by EB-5 investors against regional centers, developers and the professionals around them. Consultations are confidential.
Call Rosenberger + Kawabata at (310) 894-6921.
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