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EB-5 investors in AnC Bio project in Newport requesting refunds

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NEWPORT — Recently released documents by the state show that some investors in the AnC Bio Vermont project, scheduled to open in the fall of 2017 in Newport, are asking for their money back.

According to a memo sent by Bill Stenger to state regulators back on March 15, investor’s funds currently held in escrow will need to be released not only to refund investors pulling out, but to proceed with construction planned for this spring.

The money held in escrow is part of an agreement with the state that new investor funds solicited after March 2015 be held while the state conducts a financial review of the AnC Bio project.

“We have at this time investors that have requested refunds of their AnC Bio investment as part of their rescission rights, granted them by Commissioner Donegan,” Stenger wrote in the memo. “We must have these funds released in order to refund these investors.”

The project has not yet passed the financial review, and the Department says it still has many questions remaining about how AnC Bio funds have been spent to date.

State regulators have also refused to allow the release of money currently held in escrow to pay back refunds, because that money is not in the escrow account, having been raised before March 2015.

As of January 2015, the project had 128 investors, with a total of $71 million raised.

“We agree that the AnC Bio investors who have withdrawn from the project are entitled to a refund of their money,” Susan Donegan, commissioner of the Department of Financial Regulation, wrote in a memo to Stanger on March 25. “However, these investors are not under the amended private placement memorandum and their money is not in the escrow account.”

Stenger also wrote that funds needed to be released from escrow to continue construction at the site in Newport.

“To proceed with construction this spring these investor’s funds must be put to work,” Stenger wrote in the March 15 memo.

Donegan suggests that in both cases the developers will have to use funds already collected and transferred to a company owned by Stenger’s business partner Ariel Quiros called Jay Construction Management.

To read the full version of memos regarding this issue between developer Bill Stenger and Susan Donegan, commissioner of the Department of Financial Regulation, CLICK HERE.

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