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Point Ruston Investors Sue Over $39M in Lost Funds
1 Jul
Summary
- 78 foreign investors claim $39 million was misused in a federal lawsuit.
- The lawsuit alleges developers misapplied funds meant for the Waterwalk project.
- Total site liabilities exceed $153 million against a much lower liquidation value.
A federal lawsuit has been filed by 78 foreign investors who contributed $39 million to the Point Ruston development. These investors participated through the U.S. EB-5 program, which offers green cards for qualifying investments that create jobs. The complaint alleges that the funds were misused in connection with the Waterwalk at Point Ruston project.
Plaintiffs assert that their investments, totaling a half-million dollars each, were meant to be protected through structured lending and oversight. However, the lawsuit contends that developers, including Michael Cohen's estate and his son Loren Cohen, misapplied loan proceeds and allowed assets to be transferred without consent. This led to project default and insolvency.
The legal action names various entities, including Point Ruston LLC and American United Development Group. Financial data cited in the suit indicates total site liabilities of approximately $153.3 million, with an estimated net liquidation value of only $16.7 million. Allegations of over $26.5 million in personal and affiliate claims by Loren Cohen suggest investor funds may have been diverted.
