Category Archives:Uncategorized

SUCCESS IN FOUR CIVIL CASES in 2021

We started year 2021 with 4 winning cases. CV-19-925835 and CV-20-930311 are two companion cases in Cuyahoga Common Pleas Court filed by a plaintiff against our client, a defendant.  CV-19-925835 was filed on November 26, 2019. Plaintiff alleged breach of two contracts. Based on evidence, we quickly filed counterclaims against the plaintiff and a third-party complaint against plaintiff company’s owner. Evidence showed that the lawsuit was frivolous. More appalling, Plaintiff filed second suit against our client on March 3, 2020 with similar claims.

Plaintiff filed numerous motions to distort, delay and/or disrupt the cases, most of them were meritless. In a short period of one year during the global pandemic, a total of 46 motions/briefs were filed (21 in CV-19-925835 and 25 in CV-20-930311), not to mention many other documents, pleadings, and hearings.  This was extraordinary. Yet, our defense team defeated and dissolved all these baseless motions.

In the end, Plaintiff ran out of gas and tricks. On March 26, 2021, Plaintiff voluntarily dismissed all claims against our client in these two cases. Thus, our client achieved final success and was satisfied with our representation.

We also defended our clients in two other cases and obtained measurable success. 20CV000003 is a civil case in Lake County Common Pleas. This was another highly contested case (if not more) involved the same entity in above two Cuyahoga cases (plaintiff there). Approximately 53 motions/briefs were filed in one year. Types of motions filed by this entity (third party defendants here) included but not limited to

  • Motion to disqualify defense counsel
  • Motion to reconsideration
  • Motion for extension of time
  • Motion to compel discovery
  • Renewed and amended motion to disqualify
  • Motion for protective order
  • Motion to strike
  • Motion to dismiss
  • Substituted motion to strike
  • Motion for non-prejudicial dismissal under doctrine of forum non conveniens
  • Motion to continue
  • Motion in limine
  • Motion for leave to file sur-reply

We defeated all these motions and obtained a success for the client.

The fourth case was in Cleveland Height Municipal Court where our client, a defendant, prevailed after the trial. Case number is CVI2001426.

Big or small, plaintiff or defense work, we handle the cases with the highest level of care, professionalism and skill. If you have a business dispute, please contact us for help. 

© 2021 Copyright by Lei Jiang LLC. All rights reserved.

OHIO ADOPTS NEW LIMITED LIABILITY COMPANY ACT

On January 8, 2021 Ohio Governor Mike DeWine signed into law the Ohio Revised Limited Liability Company Act (the “New Act”). The New Act completely replaces the existing Ohio Limited Liability Company Act (Chapter 1705 of the Ohio Revised Code) with new Chapter 1706 of the Ohio Revised Code. The New Act significantly updates Ohio’s LLC law, providing increased opportunities and flexibility. This could make Ohio a potential favorable home for an LLC.

Effective Date is April 12, 2021. Applicable date is January 1, 2022.

Important Changes:

• Default Nature: The New Act emphasizes that its contents are generally “default” provisions — applicable only to an LLC that has not adopted an operating agreement with contradicting terms. This gives business-owners and investors greater flexibility to design an LLC.

• Flexible in Governance Structure: The New Act allows an LLC to be managed by member or manager. This allows an LLC to set up a governance body more akin to that of a for-profit corporation or partnership, such as a board of directors or an oversight committee.

• Ability to Eliminate Fiduciary Duties: The New Act permits an LLC to limit or eliminate entirely all fiduciary duties of members, managers, and officers. The only non-waivable fiduciary duty is the implied covenant of good faith and fair dealing. This has many implications in structuring and liabilities.

• Penalties for Failure to Perform: The New Act permits an LLC to set forth specified penalties and consequences in its operating agreement that will apply if a member breaches the operating agreement or upon the occurrence of a certain event. Business-owners should take note of this drafting flexibility as it allows them to contractually penalize certain actions and maintain control.

• Ability of Operating Agreement to Confer Rights to Person Without Economic Interest.

• Series of Limited Liability Companies: This is a drastic change. The New Act allows an LLC to establish “series” in which the assets of each series are protected from claims against and liabilities incurred by another series or the LLC as a whole. This aspect is very useful in the context of investment funds.

• Protections Against Creditors of Members: The New Act also allows an LLC to protect itself from any claims by creditors of a member, including situations where a creditor claims a security interest in a member’s interest in the LLC.

Please contact Lei Jiang law firm to update your LLC legal documents for these new ammunition and protection from the law. 

© 2021 Copyright by Lei Jiang LLC. All rights reserved.

2020 Business Valuation – A Recent U.S. Case

The U.S. Department of Labor recently prevailed in a district court of Virginia case involving multiple Employee Stock Ownership Plan (ESOP) valuation issues.

The case involved allegations that the selling shareholder, who was also a fiduciary of the employee stock ownership plan, as well as the bank hired to represent the ESOP as an independent fiduciary, breached their fiduciary duties by allowing the plan to overpay for the shareholder’s stock.

The district court issued a lengthy ruling on the case which addressed multiple common valuation practices such as normalization adjustments, discounting, capitalization rates and proper look-back periods for the purposes of capitalization. For example, the Court found that

– The conclusion of value was strikingly close to an initial estimated value that had been floated by ESOP counsel and advisors at the inception of the transaction;

– The appraisal was performed on a controlling basis even though the seller/owner and his wife were still going to be two of three ESOP co-trustees and occupy two of three company director seats;

– Almost of all of the appraiser’s assumptions, including his capitalization rate, fluctuated significantly relative to previous appraisals that he had performed on the company and all in a direction towards a conclusion of higher value;

– The appraiser did not obtain financial projections or prepare his own and get management buy-in and the appraisal utilized only a capitalized cash flow method to the exclusion of a discounted cash flow method(discounted cash flow method); and

 — The ESOP trustee raised many concerns with the draft appraisal but did not follow through and then went ahead and agreed to a purchase price before reviewing the final appraisal.

This case remind us that (1)  much discussions were needed to justify the departure from previous yearly valuations and big rise of stock value, (2) an impartial review of the valuation results might have red flagged the flaws, (3)  the fiduciaries would have been wise to remember that fiduciary duties imposed by ERISA are “the highest known to the law” and any decisions made in fiduciary capacity should have been made with an “eye single to the interests of the participants and beneficiaries.” (4) a genuine negotiation with respect to the purchase price should be conducted.

Lei Jiang Law Firm handles many aspects of business transactions. For questions, please contact us. © 2020 Copyright by Lei Jiang LLC. All rights reserved.

Cases at Cleveland Immigration Court

During August and September 2019, Lei Jiang Law Firm took six bond cases and represented these clients at Cleveland Immigration Court. Six women were not charged with any wrongdoing but were detained by immigration customs enforcement (ICE) when FBI, Ohio Investigative Unit and local police forces raided several massage establishments in Ohio in July 2019. 

All six women were Asian, did not speak much English, came from New York, worked as massage therapist/masseuse, and lacked financial resources. We represented many of them pro bono, but work quality remained high.  We interviewed these clients at ICE detention centers and discovered some were victims of human trafficking. As a result, we engaged victim advocacy professionals and arranged appropriate assessments.

In the Court, attorney Lei Jiang successfully argued on behalf of each woman and obtained reasonable bond for them. As a result of our effort, all six women were released by ICE and reunited with their families. But our work did not stop there. We provided further help, such as information and connecting these women with non-profit organizations in New York for future assistance. We were proud that we helped when they were in despair.

Practicing immigration law in immigration courts is a challenging task in today’s climate.  Law is changing rapidly, the general sentiment is against immigration, and sympathy is rarely seen in courts. Even though such cases were not in our normal line of practice, we remind committed to the basic calling of this profession – help the needed, give a voice to voiceless, and hold ourselves to the highest professional standard.  

For legal issues, please contact us.

Media Report of Zheng, et al. v. SouFun, et al.

On August 23, 2015, Ms. Zheng and several others, as representatives of a class, filed a class action at U.S. District Court Northern District of Ohio against the biggest online real estate investment portal in China SouFun Holding Ltd. and SouFun International Ltd.

The complaint alleged fraud, violation of Ohio Deceptive Trade Practice Act, violation of Ohio Consumer Sales Practice Law, violation of Ohio real estate law, unjust enrichment, and breach of fiduciary duty. Lei Jiang Law Firm represents Plaintiffs and the class.
Since this is a case involving international parties, the service was a challenge because it must go through Hague Convention service of process. Plaintiffs successfully perfected the service through Hague Convention.

Major Chinese media in China and U.S. have reported this case. The case is closely watched by many due to the ever increasing trend of Chinese investing in U.S. and global real estate.

For report from the People’s Daily, the official media, click here.
Reports from the biggest Chinese media (in Chinese) QQ, SinaSOHUNETEASE.
Reports from the biggest U.S. Chinese media (in Chinese) USChinaPress中金在线.

Another Criminal Cases Dismissed

One more criminal case against our client was dismissed on September 16, 2016. The case 2016 CRB 661 involved a charge of prostitution. Such charge, if established, would destroy the client’s life since she is a young woman.

We are committed to maximizing the chances of winning your case, even when it means beating the odds. In this case, prosecution claimed to have video and undercover police as witnesses. But after careful review of the evidence, we believe that the case was not as strong as the prosecution would like us to believe. After negotiation, the prosecutor dismissed the case against our client. Our client was thrilled.

If you are facing criminal charges, please contact us. The initial consultation is free.

Proposed EB-5 Legislation

To keep the government running, the Congress has just approved another stopgap continuing resolution, which means that the EB-5 program will remain for most of the 2016. However, it has been widely anticipated that legislation in some form will be enacted shortly to renew and reform the Program.

The current EB-5 program, which offers a family-sized set of green cards to foreigners who directly invest $1 million, or invest $500,000 into targeted employment areas (“TEAs”), has been very popular among Chinese investors in recent years.

Under the proposed legislation, once passed, the minimum investment amount in rural and high-unemployment areas would be increased from $500,000 to $800,000. For the investment projects that already had I-924 and I-526 approvals, they will enjoy a 60-day grace period. Thus, if investors submit the application within 30 days of the effective date of the new legislation, the investment amount is $600,000; between the 31st day and the 60th day, the amount is $700,000; and starting the 61st day, the amount will be adjusted to $800,000. Investment to non-TEAs will be adjusted to $1.2 million.

Also, the new legislation will redefine what constitutes the TEA. TEA designation will be tightened up. Further, the new legislation will allot a certain number of visas to different investment categories, such as 2,000 visas for projects in rural areas and 2,000 visas for people who invest $1 million, while the total number of visas remains the same.

Finally the new legislation will require more disclosure regarding how the capital is being utilized, and investors’ source of funds. The current EB-5 program has been under fire when 35 Chinese investors who lost nearly $20 million in South Dakota’s EB-5 program sued the state for fraud.

Although investors can be relieved for now, changes are likely to come. Our firm will monitor closely of any development. Let’s sit tight and wait for what is coming. Please contact us for any EB5 questions.

Application for Regional Center designation is approved without RFE

On May 19, 2015, we received a great news from U.S. Citizenship and Immigration Services (USCIS) that our application on behalf of a client for a regional center designation was approved.  USCIS approved our application in less than a year and without any requests for evidence (RFE).  This is very rare, and shows that our application is of the finest quality.

At Lei Jiang LLC, we routinely file various immigration applications and petitions.  Our success rate has been approaching 100% (excluding cap related limitations and back log issues).  We carefully prepare each application, provide additional documents, and explain clearly and concise about the issues to USCIS.  As a result, the applications prepared by our firm have a measurable advantage over applications prepared by others.

EB 5 immigration is said to be the most complex area of immigration law.  It is called “the cream of immigration law.”  Setting up and providing legal service to a regional center is deemed to be the cream of the crop.   Yet, with skills and determination, the attorneys at Lei Jiang LLC have achieved remarkable feat in a relatively short period of time.

For any immigration issues, please feel free to contact us. The initial consultation is free.

EB5 Regional Center Questions and Answers

Question: What is the difference between Regional Center and a direct investment? What are the pros and cons of each? Can the EB-5 investor be limited in the legal exposure/management of the project, such as is often the case defined by being a limited partner in an indirect EB-5 investment through a Regional Center?

Attorney Lei Jiang: The main difference is that a regional center can utilize indirect job creation while a direct investment cannot.  Moreover, direct investment normally requires more involvement from investors.  Regional center projects, on the other hand, have a team of professionals. So investors are all passive investors.

Question: Why does I-924 takes from targeted 4 month to 9 month? What are the reasons for this delay?

Attorney Lei Jiang: I-924 normally takes 9 month or longer. USCIS wants to be careful but lack of officers. So it is backlogged.

Question: Do I submit my project directly to a Regional Center? I am a real estate developer in Indianapolis. I have a project in Chicago which will generate 50 new jobs and the project total cost is $10 million.

Attorney Lei Jiang: You should contact Chicago regional centers to see if they are interested in your project.

Question: Do you need to have an EB-5 Project in order to start your own Regional Center? I want to know the requirements to start a regional center myself, and if I need to have a project ready before applying to become a Regional Center?

Attorney Lei Jiang: No. You do not need an actual project for regional center application, but as part of the application, you need to submit a hypothetical/exemplar project plan.

Question: I have a project but I don’t want to wait a year or so to get a regional center designation. Can I purchase an existing one? Would I need an immigration lawyer to help me in the transaction if it is possible?

Attorney Lei Jiang: Yes, you can if a regional center agrees to sell.  Alternatively you can “rent” one. You do not need immigration attorney for this transaction but it is good to have one. You need to understand immigration issues.

Question: Does your law firm offer the service of establishing a regional center? And approximately how much would it cost for this service? Thanks.

Attorney Lei Jiang: Yes we do.  It normally runs around $80,000 to 120,000. There are many other law firms offering such service.

Question: What is the benefit of investing in an EB-5 Regional Center as opposed to going with a direct investment in an EB-5 project?

Attorney Lei Jiang: You can utilize an economic model for job calculation. 10 required jobs for every investor (normally with  $500,000 investment) is difficult to achieve for many business ventures.

©Lei Jiang Law Firm 2014.

EB5 Regional Center Questions and Answers

Question: I am planning to invest in my own project but it might not create 10 direct jobs in 2 years. There is a Regional center in the same area with a similar project. How could I work with the regional center and create a structure to leverage their ability to include indirect jobs?

Attorney Lei Jiang: You need to talk to them. One benefit of using regional center is that you can count indirect jobs.

Question: Why do Regional Centers use mezzanine financing? Isn’t mezzanine financing risky?

Attorney Lei Jiang: This kind financing is commonly used in real estate. Since most regional centers have real estate projects. You should not be surprised by this type of financing.

Question: What would be an applicant’s position if EB5 pilot program is not renewed (Sept 2015) after approval of his I-526? Would all rights to obtain residence be lost? Could an investor sell his investment immediately to reclaim funds?

Attorney Lei Jiang: It’s unlike that the program will not be renewed.  Whether the investor can sell his investment or not depends on the subscription agreement and other legal documents that he has signed. Investors should always read these legal documents very carefully and/or seek professional help.

Question: What is the process for filing a complaint against a Regional Center for fraud? I am a project sponsor who paid a non-refundable deposit to a firm representing itself as an established Regional Center. The Regional Center I wish to file a complaint against is the parent of the firm we paid, but wasn’t an approved center at the time of payment. Also, how do I access the date on which a Center was approved? The USCIS website does not list that information, and my email inquiries to them have been rejected.

Attorney Lei Jiang: All approved centers are listed on USCIS website. So if a regional center has not been approved, it will not be on the USCIS list. Normally you can file a lawsuit (complaint) in a common pleas court or a federal district court which has the jurisdiction of this company. You need a lawyer for that.

Question: My main goal is the preservation of my capital. What are the chances that the regional center does not return the principal? Do regional centers return the full principal I’ve invested with them at the end of the 5 or 6 year period? How often do they fail and how can I find the regional center which has no failure record.

Attorney Lei Jiang: Do your research and talk to EB5 attorneys (they know the regional centers)! It’s just like other investments (stocks, bonds, etc.).

Question: How do you go about using an EB5 Regional Center to fund a project, without becoming designated as a regional center yourself? I have a business in Colorado and have researched the EB5 program. Once I find a regional center whose designation I may use, who does the reporting to USCIS and do I have to do a business plan and economic impact study to work through the regional center. What does the Regional Center have to provide the USCIS with if a third part project is using its designation?

Attorney Lei Jiang: You need to talk to the regional center to see whether you can utilize it and how to do it. Business plan and economic report are needed for immigration petitions.

©Lei Jiang Law Firm 2014.