For Part I of this story, please see our previous blog post.
As we've seen with other EB-5 visa offerings, foreign and U.S. promoters rarely hesitate to portray projects positively before prospective EB-5 investors ? whether there's anything positive to portray or not.
And despite the NBP project's history of liens, property tax delinquency, and multiple lawsuits over the last several years, the press it gets in China is, from what we can tell, quite favorable.
Brian Su of the Artisan Business Group, who assisted SDRC in promoting several offerings that include the NBP project, has called SDRC "one of the most solid regional centers in [the] Chinese market." Even the Office of the Governor of South Dakota sent officials to China to promote the effort and lend validity to the notion that NBP's new facility was a great opportunity.
The SDRC position
When it comes to the most recent lawsuit, SDRC principal Joop Bollen doesn't think the Henry Global-recruited plaintiffs have a case. He says that all essential information was disclosed to the investors in full and that it's Henry Global that wants SDRC to release additional information.
The way he sees it, Henry Global either wants to frighten SDRC into pressuring NBP to pay the disputed fees or it wants to destroy SDRC entirely in retaliation for its not receiving the commissions NBP can rightfully claim the promoter never earned. Either scenario, Bollen says, stems from the fact that Henry Global knows it can't go after NBP directly because it simply cannot make the case that it performed according to the agreement.
"I've been speaking to the limited partners," he said. "They don't know whether to trust me or Henry Global."
Bollen's chief concern is that a pending lawsuit could halt the flow of state and local dollars to the project, effectively putting progress at a standstill. "The state told us they would sit back and wait," he said. "I think they now understand that it's not a serious lawsuit. The biggest issue is that this could freeze the project by holding back the funding."
SDRC pays agents a commission of $30,000 per investor, which Bollen says is standard. He also says he was not party to the agreement NBP made with Henry Global. The agency is "simply attempting to destroy SDRC at any cost, even if that is at the expense of investors Henry Global recruited," he said.
Ironically, it is the investors who stand to lose the most from entering a lawsuit against the regional center. After all, the project must move forward if they are to receive green cards through the EB-5 visa program.
If, in fact, Henry Global is pitting these investors against SDRC at their own expense, it would appear to be a big disservice both to them and to their opportunity to live in the United States.
And if legal issues once again hinder progress at NBP's beef packing facility, it would demonstrate yet again just how volatile, risky, and setback-prone many EB-5 visa projects are ? whether they have government backing or not.