2024/1/29 18:25 (updated at 1/29 18:48)
Hong Kong TVB reported that Evergrande Group, a large Chinese real estate company, was issued a compulsory liquidation order by the Hong Kong High Court on the 29th. (Reuters)
(Central News Agency, Taipei, 29th) The Hong Kong High Court today ordered the liquidation of Evergrande Group, a large Chinese real estate company. Some experts said that this does not mean that there is no room for maneuver. In some cases, the debtor may reach a debt restructuring agreement with its creditors to avoid bankruptcy liquidation or seek other solutions to reorganize its financial situation; No foundation.”
Ifeng.com, headquartered in Hong Kong, today quoted Li Min, senior partner of Shanghai Hansheng Law Firm, as saying that this means that the Hong Kong High Court has confirmed the validity of Evergrande’s bankruptcy application and will further handle the debtor’s property and debts and transfer the debtor Assets are converted into cash, which is used to pay down debt.
Li Min further stated that this does not mean that there is absolutely no room for change, because bankruptcy and liquidation can have different results. In some cases, a debtor may enter into a debt restructuring agreement with its creditors to avoid bankruptcy liquidation or seek other solutions to restructure its financial situation.
Shanghai Zhengce lawyer Dong Yizhi believes that China Evergrande is likely to continue to appeal, “but this will not affect its bankruptcy and liquidation process.” Most of Evergrande’s major assets are still in China, and when it comes to liquidation and execution, they will eventually fall under the framework of Chinese law.
For owners who have bought Evergrande pre-sale houses in mainland China, Dong Yizhi said that there will not be much impact, because mainland China has a “guaranteed delivery” policy, and many developers of Evergrande projects are relatively independent. The creditor has no right to deal with it.
It is worth noting that according to a previous announcement by the Supreme People’s Court of China, the “Reply of the Supreme People’s Court on the Protection of Consumer Rights in Commercial Housing” will come into effect on April 20, 2023. This approval provides a clear judicial interpretation of the order of rights of commercial housing consumers in construction suspension cases, that is, under corresponding conditions, commercial housing consumers’ claims for housing delivery and price refund claims have priority over other claims.
Some experts also pointed out that “there is almost no basis for reorganization in the case of liquidation.”
The mainland media “21st Century Business Herald” quoted a senior partner of a well-known Hong Kong accounting firm who is familiar with cross-border restructuring as saying that judging from market cases over the years, the liquidation of Evergrande has no direct causal relationship with the company’s size and debt complexity. The key reason should be that since the company’s debt crisis, major financial and management problems such as illegal occupation of funds and illegal guarantees have been exposed one after another.
In addition, the expert said, market public opinion is also highly concerned about Evergrande’s long-term false exaggeration of hundreds of billions of revenue. Recently, founder Xu Jiayin and managers of Evergrande Wealth Management Company have been subject to criminal enforcement measures for suspected violations of the law, which confirms the The internal management of Evergrande Group has been chaotic and out of control for a long time, and even violated the law.
China Evergrande, which is listed in Hong Kong, defaulted on its overseas debt for the first time in 2021. After that, it negotiated with creditors many times and failed to reach a restructuring agreement. In June 2022, it was finally registered with the creditor Top Shine Global in Samoa, a Pacific island country. ) applied for winding up, and the hearing was postponed several times during the period. (Editor: Zhou Huiying/Zhang Shuling) 1130129
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