On September 13, 2024, Weil won a decisive victory on behalf of client New York City Regional Center, LLC (NYCRC), when the U.S. Court of Appeals for the Second Circuit issued an order affirming in its entirety a lower court’s dismissal of all claims in a $50M+ investor “mass action.”

The Second Circuit’s ruling upholds a September 28, 2023 decision by the S.D.N.Y. dismissing with prejudice all of the more than 100 EB-5 investor plaintiffs’ fraudulent inducement and breach of fiduciary duty claims asserted against NYCRC.

The EB-5 investors had subscribed to one of two funds formed and managed by NYCRC to obtain green cards under the federal EB-5 program. NYCRC, a USCIS-approved regional center, ensured that the investors and their immediate families all achieved permanent U.S. residency by deploying the EB-5 capital to help finance the completed redevelopment of the George Washington Bridge Bus Station. The plaintiffs filed their lawsuit in 2022 after the Station’s developer filed for bankruptcy and, despite NYCRC’s best efforts to protect the investors, the EB-5 capital was wiped out along with all other prepetition claims in the bankruptcy court.

Following oral argument, the Second Circuit affirmed the district court’s ruling, in particular endorsing the trial court’s finding that the statute of limitations bars plaintiffs’ fraudulent inducement claims, and that the business judgment rule precludes plaintiffs’ breach of fiduciary claims. Pointedly, the Second Circuit noted that “[n]one of plaintiffs’ counterarguments is persuasive.”

The Weil team was led by David Lender, Co-Chair of Weil’s global Litigation Department, and Greg Silbert, Co-Head of the Firm’s Complex Commercial Litigation and Appeals and Strategic Counseling practices, and included Complex Commercial Litigation partner Jessica Falk and associates A.J. Green, Shai Berman and Mark Pinkert.