This is one of many questions that should be asked by any prospective investor of all regional centers they are considering. Every regional center should be able to respond to this question because this is something they should have considered already. What is a “worst case scenario” and what will happen to the investment and the hopes of the immigration pursuit of its limited partners if a “worst case scenario” becomes a reality. There are two concerns being discussed here, investment and immigration.
Investment. CMB's EB-5 partnerships enter into loan agreements with government entities, public/private partnerships, and private entities. In all cases each borrower pledges various sources for repayment of the loan to the CMB EB-5 partnership in the event of default and other collateral, including payment guarantees, intercreditor agreement, and fund control accounts. Additionally, many of the borrowers provide a membership pledge to the CMB EB-5 partnership, which allows the partnership to take over the ownership of project in the event of the borrower's default.
Immigration. CMB EB-5 partnerships rely only upon model derived jobs that are proven through reasonable methodologies, unlike operations phase direct jobs that would require government forms such as W-2’s, I-9’s and citizenship papers for every investor. Each of the projects are required to have a completion guarantee, which will require the project to be built and the money be spent even in the event of default by the borrower. Since the indirect and induced jobs are created as monies are spent, the completion guarantee will help ensure that there is sufficient job creation for each EB-5 investor.