Summary Judgment Granted to Analysis Group Clients in Fraud and Fiduciary Duty Litigation

November 3, 2026

Analysis Group was retained on behalf of New York City Regional Center (NYCRC), the New York City East River Waterfront Development Fund (the Fund), and other fund managers, the defendants in a “mass action” brought by investors alleging fraud and breach of fiduciary duty. The defendants raised capital from the plaintiffs and others to fund a loan for the renovation of the Battery Maritime Building in New York City. The plaintiffs invested in the Fund to seek permanent US residency under the EB-5 Immigrant Investor Program (the Program), which offers green cards to foreign investors who place capital at risk to create permanent jobs for US workers. After the project developer’s affiliate defaulted on the $77 million loan and the renovation stalled, the plaintiffs sued, alleging that the defendants made material misrepresentations and omissions in the Fund’s offering materials and breached their fiduciary duties, including by paying management fees from loan proceeds despite the default.

An Analysis Group team led by Managing Principal Aaron Yeater; Principal Xinyu Ji; Vice Presidents Shannon Seitz and Ilona Mostipan; and Managers Igor Cerasa, John Dooley, Aditya Mohan, and Kritika Narula supported four experts in the matter, who submitted reports and testified at deposition. Managing Principal Jee-Yeon Lehmann opined on the economic value of the green card that plaintiffs obtained through their investment under the Program; Professor Timothy Riddiough opined on damages; affiliate Susan Fine opined on industry practices for commercial real estate development; and independent consultant Matthew Galligan opined on industry practices for construction lending.

On October 13, 2026, Justice Robert R. Reed of the Commercial Division of the New York State Supreme Court granted the defendants’ motion for summary judgment. On the fraud claims, the court found that the offering materials clearly disclosed the investment’s material terms and risks and that the plaintiffs had represented that they received, read, and understood them. The court also found that the plaintiffs could not show damages because they had received their green cards. On the fiduciary duty claims, the court found that the offering materials disclosed NYCRC’s entitlement to management fees and that NYCRC’s decisions in managing the Fund were made in good faith and protected by the business judgment rule.