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| China property giant Evergrande files for bankruptcy | |
| 2023-08-18 | |
| [GEO.TV] China Evergrande which is the world's most heavily indebted property developer and became the poster child for China's property crisis, Thursday filed for protection from creditors in a US bankruptcy court. The company sought protection under Chapter 15 of the US bankruptcy code, which shields non-US companies that are undergoing restructurings from creditors that hope to file lawsuits or tie up assets in the United States. Tianji Holdings, a related company, also sought Chapter 15 protection Thursday in Manhattan bankruptcy court. A lawyer for Evergrande did not immediately respond to requests for comment. Evergrande's filing comes amid growing fears that problems in China's property sector could spread to other parts of the country's economy as growth slows. Since the sector's debt crisis unfolded in mid-2021, companies accounting for 40% of Chinese home sales have defaulted. The health of Country Garden, China's largest privately run developer, is also worrying investors after the company missed some interest payments this month. Evergrande recently had $330 billion of liabilities. A late 2021 default triggered a string of defaults at other builders, resulting in thousands of unfinished homes across China.
Evergrande has said creditors may be able to vote this month on a restructuring, with possible approval by Hong Kong and British Virgin Islands courts in the first week of September. The company proposed scheduling a Chapter 15 recognition hearing for Sept. 20. Evergrande is the world's most heavily indebted property developer and became the poster child for China's property crisis. The company’s filing on Thursday comes amid growing fears that problems in China's property sector could spread to other parts of the country's economy as growth slows. Since the sector's debt crisis unfolded in mid-2021, companies accounting for 40% of Chinese home sales have defaulted. A late 2021 default triggered a string of defaults at other builders, resulting in thousands of unfinished homes across China. Last month, Evergrande posted a combined $81 billion loss for 2021 and 2022, prompting investor worries about the viability of a debt restructuring plan it proposed in March. | |
| Posted by:Fred |
| #8 So, like, are the Chinese selling US Treasuries because the US is more of an adversary or do they need the dough? They are probably not too keen on the US Fed raising interest rates, either....all that property and all that debt. |
| Posted by: DooDahMan 2023-08-18 18:18 |
| #7 Another way to put it is: Can you take discovery from a guy who has nuclear weapons? |
| Posted by: Matt 2023-08-18 15:11 |
| #6 ^ Guessing that fine print ain't pretty... |
| Posted by: M. Murcek 2023-08-18 14:34 |
| #5 An interesting (to me, at least) question will be the extent to which creditors of Evergrande can use the Chapter 15 proceeding to investigate Evergrande's financial dealings. For example, can a creditor ask whether any money that would otherwise be available to pay the creditor was transferred to Emperor Xi and his boys. That would be a no-brainer in a regular US Chapter 11, but Chapter 15 has some "play nice with the other guys" wrinkles to it. |
| Posted by: Matt 2023-08-18 14:13 |
| #4 And yet China keeps purchasing property in the US, coincidentally near US Military facilities... |
| Posted by: Frank G 2023-08-18 12:47 |
| #3 Lost your money betting on a Chinese company? Gosh, that's too bad. |
| Posted by: Zorba Tholugum4787 2023-08-18 12:43 |
| #2 Does the above grim description of China's economic, and thus social, crisis argue for XI to act on Taiwan. Classic external distraction, Wag the Dog, Patriotic War, main enemy led by Biden is feckless and weak, US is in huge social deterioration, US/NATO hugely compromised logistically by Ukraine miasma, never going to be a better time? |
| Posted by: NoMoreBS 2023-08-18 11:26 |
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| Posted by: Skidmark 2023-08-18 06:55 |