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UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF FLORIDA 

FORT LAUDERDALE DIVISION 

IN RE: 

DESTINATION HOPE, INC., 

 Debtor. 

 / 

NOTICE OF THE UNITED STATES OF AMERICA CONCERNING REVIEW 

OF CERTAIN FOREIGN TRANSACTIONS 

The United States of America, by its attorney, Raychell Tasher, Assistant United States 

Attorney for the Southern District of Florida, respectfully submits this statement to address the 

possibility that certain transactions that the debtors, Destination Hope, Inc., (“Debtor”), may 

propose in this case may be subject to the jurisdiction of the Committee on Foreign Investment 

in the United States (CFIUS). A CFIUS review could affect the ability of the parties to complete 

the transaction, the timing of their completion, and/or their terms. 

A. Procedural Background 

1. On August 28, 2020, Debtor commenced its voluntary chapter 11 case. 

ECF No. 1. On August 30, 2020, Debtor filed various motions, seeking, among other things, 

authority to pay payroll, to use cash collateral of SG Credit Partners, and to compensate Officer 

Affiliates (“First Day Motions”). See ECF Nos. 3-6. 

2. Debtor was granted the use of cash collateral of SG Credit Partners and Newtek 

small business finance. See ECF No. 41. 

3. Debtor has filed motion to approve the sale of substantially all of the Debtors 

CASE NO.: 20-19402-PDR

CHAPTER 11 

Case 20-19402-PDR Doc 117 Filed 12/03/20 Page 1 of 9
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assets free and clear of all liens. See ECF No. 99. 

4. The United States files the present Notice to alert and inform the parties and the 

Court that sales of the company or disposition of any company assets may be subject to CFIUS 

review for national security concerns. Provided in the following sections is some additional 

background information on CFIUS’s purpose and its general review process. 

B. CFIUS’s Purpose and Membership 

5. CFIUS is an inter-agency committee authorized to review certain transactions 

involving foreign investment in the United States (referred to as “covered transactions”), in 

order to determine the effect of such transactions on the national security of the United States. 

See 50 U.S.C. § 4565(b)(1)(A). Covered transactions include any such transactions that arise 

“pursuant to bankruptcy proceedings.” Id. § 4565(a)(4)(F) 1; 31 C.F.R. § 800.213 note 1 

(2020). 

6. Section 721 of the Defense Production Act of 1950, as amended, authorizes the 

President, acting through CFIUS, to review any merger, acquisition, or takeover, “by or with a 

foreign person that could result in foreign control of any United States business.” 50 U.S.C. § 

4565(a)(4)(B)(i). The term “control” is defined as “the power, direct or indirect, whether 

exercised or not exercised, to determine, direct, or decide important matters affecting an entity, 

subject to regulations prescribed” by CFIUS. Id. § 4565(a)(3); see also 31 

C.F.R. § 800.208(a). The relevant regulations broadly define foreign entity and foreign person 

to include any individual who is not a U.S. national or certain entities organized under a foreign 

1

 The Department of the Treasury recently published final regulations fully implementing this provision, 

which became effective on February 13, 2020. See Provisions Pertaining to Certain Investments in the 

United States by Foreign Persons, 85 Fed. Reg. 3, 112 (Jan. 17, 2020). 

Case 20-19402-PDR Doc 117 Filed 12/03/20 Page 2 of 9
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state’s laws. 31 C.F.R. §§ 800.220 - 800.224. Covered transactions could include the 

acquisition by a foreign person, foreign entity, or foreign government of an entity engaged in 

interstate commerce in the United States (a U.S. business), including components of a business 

or assets that constitute a U.S. business under the CFIUS regulations. See generally id. Part 800. 

7. The Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA),2

broadened the authorities of the President and CFIUS under section 721 to address national 

security concerns arising from certain investments and real estate transactions. FIRRMA 

explicitly added four types of transactions as “covered transactions” under section 721: (1) the 

purchase or lease by, or concession to, a foreign person of certain real estate in the United 

States; (2) any “other investment” that, although does not result in foreign control, affords a 

foreign person equity interest in and specific access to information in the possession of, rights 

in, or involvement in the decision-making of certain U.S. businesses involved in certain critical 

technologies, critical infrastructure, or sensitive personal data; (3) any change in a foreign 

person’s rights if such change could result in foreign control of a U.S. business or another 

investment in certain U.S. businesses; and (4) any other transaction, transfer, agreement, or 

arrangement, the structure of which is designed or intended to evade or circumvent the 

application of section 721. 50 U.S.C. § 4565(a)(4)(B)(ii)-(v). 

8. The members of CFIUS include the Secretaries of the Treasury 

(the Chair), State, Defense, Commerce, Energy, and Homeland Security; the Attorney General; 

the United States Trade Representative; and the Director of the White House Office of Science 

and Technology Policy; the heads of any other executive department, agency, or office may 

2 See John S. McCain National Defense Authorization Act for Fiscal Year 2019, tit. XVII, Pub. L. No. 

115-232, 132 Stat. 1636, 2173 (2018). 

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participate as determined to be appropriate on a case-by-case basis. 50 U.S.C. § 4565(k)(2). 

The Secretary of Labor and the Director of National Intelligence are nonvoting, ex officio 

members. 

C. The CFIUS Process 

9. CFIUS review can be initiated voluntarily, though certain filings are mandatory. 

See 31 C.F.R. § 800.401. Certain covered transactions must be reported where “a foreign 

government has, directly or indirectly, a substantial interest.” 50 U.S.C. § 

4565(b)(1)(C)(v)(IV)(bb)(AA). 

10. Additionally, CFIUS has issued regulations requiring the reporting of certain 

covered transactions involving certain U.S. businesses that produce, design, test, manufacture, 

fabricate, or develop one or more critical technologies. Id. § 4565(b)(1)(C)(v)(IV )(cc).3 

11. Any party to a covered transaction may file a voluntary notice of the transaction, 

or CFIUS can unilaterally initiate review of the transaction. See id. § 4565(b)(1)(C), (D). Once it 

receives notification of a covered transaction (and after an initial review period to accept a 

written notice or provide comments), CFIUS must complete a “review” within 45 days of 

accepting the notice filed by the parties, or of the date of its unilateral initiation of review. Id. § 

4565(b)(1)(C)(i)(II)(aa), (b)(1)(F). 

12. Following this review period, two principal outcomes are possible. First, CFIUS 

could decide not to undertake an investigation and conclude its action with respect to the 

3 The Department of the Treasury recently issued a final rule requiring mandatory reporting of certain 

foreign investment transactions involving a U.S. business that produces, designs, tests, manufactures, 

fabricates, or develops one or more critical technologies. Provisions Pertaining to Certain Investments 

in the United States by Foreign Persons, 85 Fed. Reg. 57,124 (September 15, 2020); see also 31 

C.F.R. Part 801. 

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transaction. See 31 C.F.R. § 800.506; see also 50 U.S.C. § 4565(b)(2)(B). Alternatively, CFIUS 

may initiate an investigation into the “effects of [the] covered transaction on the national 

security of the United States,” which must be concluded within 45 days. 50 U.S.C. § 

4565(b)(2)(A), (C). 

13. Upon completion of its investigation, CFIUS may conclude its action with 

respect to the transaction, 31 C.F.R. § 800.508(d), or, if it determines that the transaction poses 

national security concerns that cannot be resolved, unless the parties choose to abandon the 

transaction, CFIUS will send a report to the President requesting his decision on whether to take 

an action to suspend or prohibit the transaction, 50 U.S.C. § 4565(d)(1), which must be made 

within 15 days, id. § 4565(d)(2). Such an action taken by the President is not subject to judicial 

review. Id. § 4565(e). 

14. CFIUS may seek to mitigate any threat to national security that arises as a result 

of a covered transaction by entering into agreements or imposing conditions on the transaction. 

See 50 U.S.C. § 4565(1)(3)(A). In addition, the process can be prolonged by pre-notification 

informal consultations, id. § 4565(b)(1)(C)(i)(II); see also 31 C.F.R. § 800.501(g) (encouraging 

such discussions); withdrawal by the parties of a written notification of a transaction, 50 U.S.C. 

§ 4565(b)(1)(C)(ii); or informal discussions regarding possible resubmission, id. § 

4565(b)(1)(C)(iii). Conversely, CFIUS has also implemented, pursuant to FIRRMA, 

procedures for the submission of review of “declarations”, abbreviated notifications that permit 

CFIUS to review transactions on potentially a faster timeline. 

15. In conducting its national security risk analysis, CFIUS considers issues 

including domestic production needed for projected national defense requirements and the 

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capability and capacity of domestic industries to meet national defense requirements, the 

potential effects of the proposed or pending transaction on U.S. international technological 

leadership in areas affecting national security, the potential national security-related effects on 

critical infrastructure, and the potential national security-related effects on critical technologies. 

See id. § 4565(f). The statute provides a non-exclusive list of factors that CFIUS considers in 

assessing national security risk, id. § 4565(f)(1)-(10), but “other factors” may also be considered 

“as the President or [CFIUS] may determine to be appropriate, generally or in connection with a 

specific review or investigation,” id. § 4565(f)(11). 

D. Confidentiality in the CFIUS Review Process 

16. The CFIUS review process is subject to statutory confidentiality provisions, with 

limited exceptions for disclosure, including as may be relevant to any administrative or judicial 

action or proceeding. See 50 U.S.C. § 4565(c). Unpermitted disclosure of certain information 

or material filed with CFIUS can result in criminal penalties, including fines and imprisonment. 

See 31 C.F.R. § 800.802. “[T]here is ... a clearly articulated intention, on the part of each of 

the legislative and executive branches of our government, that the CFIUS process remain 

confidential.” In re Global Crossing. Ltd., 295 B.R. 720, 724-25 (Bankr. S.D.N.Y. 2003). The 

CFIUS statutory and regulatory confidentiality provisions apply in bankruptcy. See id.; see also 

Fed. R. Bankr. P. 9018 (“[T]he court may make any order which justice requires ... to protect 

governmental matters that are made confidential by statute or regulation.”). Nothing in the 

CFIUS regulatory confidentiality provisions, however, prohibits, “public disclosure by a party 

of documentary material or information that it has submitted or filed with” CFIUS. See 31 

C.F.R. § 800.802(d). 

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E. Conclusion 

17. Accordingly, if the transactions resulting from these proceedings involve a 

foreign acquirer and CFIUS identifies national security concerns with such transactions, CFIUS 

or the President could take actions that affect the ability of the parties to complete the 

transaction, the timing of its completion, or the terms of the transaction. 

 Respectfully submitted, 

 ARIANA FAJARDO ORSHAN 

 UNITED STATES ATTORNEY 

 

 By: /s/ RAYCHELL TASHER 

RAYCHELL TASHER 

Assistant United States Attorney 

Florida Bar No. 109291 

Raychell.Tasher@usdoj.gov 

99 N.E. 4th Street, Suite 300 

Miami, Florida 33132 

Telephone: (786) 439-3185 

Facsimile: (305) 530-7139 

 Counsel for the United States of America 

 

Of Counsel: 

ERIC S. JOHNSON 

Deputy Chief 

LAURA A. WALLACE 

Attorney-Advisor 

Department of Justice 

National Security Division 

Foreign Investment Review Section 

   

Case 20-19402-PDR Doc 117 Filed 12/03/20 Page 7 of 9
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CERTIFICATE OF SERVICE 

 I HEREBY CERTIFY that on December 3, 2020, I electronically filed the 

foregoing document with the Clerk of the Court using CM/ECF. I also certify that the foregoing 

document is being served this day by transmission of Notices of Electronic Filing generated by 

CM/ECF to those parties registered to receive electronic notices of filing in this case or via U.S. 

mail as listed in the below Service List. 

Service List 

20-19402-PDR Notice will be electronically mailed to: 

Paul J. Battista, Esq on behalf of Creditor City National Bank of Florida 

pbattista@gjb-law.com, gjbecf@gjb-law.com;chopkins@gjb-law.com;jzamora@gjblaw.com;gjbecf@ecf.courtdrive.com;vlambdin@gjb-law.com 

Adisley M Cortez Rodriguez on behalf of U.S. Trustee Office of the US Trustee 

Adisley.M.Cortez-Rodriguez@usdoj.gov 

Jay M Gamberg on behalf of Creditor Eastgroup Properties LP 

Vsantoro@gamberglaw.com, jaygamberg@gamberglaw.com;jaredgamberg@gamberglaw.com 

Gerard M Kouri Jr., Esq on behalf of Creditor Ford Motor Credit Company LLC 

gmkouripaecf@gmail.com, gmkouri@bellsouth.net 

Philip J Landau on behalf of Creditor SG Credit Partners 

plandau@slp.law, 

plandau@ecf.courtdrive.com;pdorsey@slp.law;dwoodall@slp.law;dlocascio@slp.law;ependergr

aft@slp.law;pmouton@slp.law;dlocascio@ecf.courtdrive.com 

Office of the US Trustee 

USTPRegion21.MM.ECF@usdoj.gov 

Chad P Pugatch, Esq. on behalf of Creditor Benjamin & Suzanne Brafman 

cpugatch.ecf@rprslaw.com 

Jordan L Rappaport, Esq on behalf of Interested Party David Gussack 

office@rorlawfirm.com, 1678370420@filings.docketbird.com 

C David Tangora, Esq on behalf of Creditor Cynthia (Cindy) Wisdom 

tangoralaw@bellsouth.net, 

aarothman@att.net;tangoradr87837@notify.bestcase.com;bkcoutsourcellc@gmail.com 

Case 20-19402-PDR Doc 117 Filed 12/03/20 Page 8 of 9
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Howard S Toland on behalf of Creditor Newtek Small Business Finance, LLC 

htoland@mitrani.com 

Aaron A Wernick on behalf of Debtor Destination Hope, Inc. 

awernick@wernicklaw.com, awernick@ecf.courtdrive.com;crubin@wernicklaw.com 

Case 20-19402-PDR Doc 117 Filed 12/03/20 Page 9 of 9