A Washington federal judge on Wednesday approved a $3 million plan to save a restaurant and retail development backed by Chinese investors seeking EB-5 visas whose future was unclear after the U.S. Securities and Exchange Commission sued the project’s developer for fraud.
Michael A. Grassmueck, who was appointed to run nine entities linked to accused developerLobsang Dargey, told the court in December that he could get a farmers market and cafe project in Everett, Washington, off the ground and benefit the investors if the court signed off on the financial terms.
The receiver shared more details with the court last month, outlining how the EB-5 group was willing to take possession of the company that manages the marketplace, known as SnoCo, and direct 95 cents of every dollar of net cash flow to the Chinese investors who were victims of the alleged fraud. Grassmueck asked the court to approve the plans quickly, citing the need to finish the buildout of the marketplace before fall, and got the order he sought on Wednesday.
“The proposed terms will confirm [EB-5 group]'s agreement to complete the development as originally planned, which will preserve certain tax benefits offered by the city of Everett,” he said in a filing. “The receiver also considered the potential financial return to the EB-5 investors, as well as their immigration interests.”
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