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Evergrande seeks U.S. court nod for $32 billion debt overhaul as China economic fears mount

15 Comments
By Clare Jim, Jonathan Stempel and Dietrich Knauth

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15 Comments
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Bar the move. Let the Chinese company and its government support suck pond water. Won't hurt US $.

6 ( +8 / -2 )

I agree with the poster above. Let them run to their Dear Leader (Xi) for protection and a warm embrace. They have all they need in the perfect communist society.

4 ( +5 / -1 )

Bar the move. Let the Chinese company and its government support suck pond water. Won't hurt US $.

Please read up on what Chapter 15 is. It is essentially the US courts recognizing that a firm is in a bankruptcy proceeding in its home country and gives the company access to the US court system to deal with minor assets in the US. If the US were a major center of business for the company they would not be eligible to file under Chapter 15 and would have to file either Chapter 7 liquidation or Chapter 11 reorganization.

In this case the reorganization is being carried out in China. Evergrande has minor assets in the US that may be affected by the reorganization in China, which will go forward no matter what the US courts do or do not do. US jurisdiction would be limited to any debtors located in the US.

All of this is the U.S. domestic adoption of the Model Law on Cross-Border Insolvency promulgated by the United Nations Commission on International Trade Law ("UNCITRAL") in 1997, and it replaces section 304 of the Bankruptcy Code.

-1 ( +2 / -3 )

Please read up on what Chapter 15 is

Agreed, there is more to it than what the press has been able to print. No body knows what kind of instruments (assets) fall under this filing, who owns it, and how it'd dealt with by both US court and Chinese court. There are bonds and their derivatives (including hybrids) that exists both in USA and China.

So far, US investors have lost a lot of money, at the same time, the Chinese knows if they don't play fair to US investors the whole of China can end up locked out of the financial system like Argentina. The only thing for certain is, Evergrande founders appears to be successful in paying off CCP officials so as to protect their own wealth from being seized.

1 ( +1 / -0 )

Evergrande is only filing for bankruptcy in the USA to protect its assets there, that is all this is about. Whether or not, they, and the other major property developers in China can save themselves is very doubtful. For years and years they have corrupted local officials and bank officials into getting every thing they want, and at a great cost to the home buyers, millions of whom have now lost their life savings and have no home, but they have no comeback against any of these jerry builders who are protected by local laws and the CCP. Never buy a house in China.........Oh, you cannot, unless you are Chinese, but even then you do not actually own it, it still belongs to the CCP.

3 ( +3 / -0 )

It's as if nobody understands economics here. China is far better off than Japan, Canada and England. Their standard of living, diet, health, infrastructure, etc. are all far better off than the aforementioned nations. They might not win a soccer contest, hockey exhibition or sumo tournament, but they are crushing Canada, England and Japan economically and militarily. Evergrande is but a drip in the bucket. Don't fall for sensationalist dreck. China is coming and you can't stop it.

-8 ( +2 / -10 )

It's as if nobody understands economics here. China is far better off than Japan, Canada and England.

Bizarre post. Are you sure you are commenting on the right story?

Which of those 4 countries would you least like to live in?

It's China, isn't it?

6 ( +8 / -2 )

It's as if nobody understands economics here. China is far better off than Japan, Canada and England. 

Shanghai is China's wealthiest city and I have spent much time there with family in their homes. There is no amount of money in the world that could coax me into moving there. Canada, Australia, New Zealand, the western US and yes Japan are all much nicer places to live than anything you can find in China.

3 ( +4 / -1 )

Evergrande is only filing for bankruptcy in the USA to protect its assets there,

That is not exactly what Chapter 15 is. It signifies a company who's primary business is abroad but which has minor holdings in the US is being reorganized abroad and that reorganization could affect those minor assets it holds in the US. If Evergrande's primary holdings were in the US it could not file under Chapter 15 but instead would have to file under Chapter 7 or Chapter 11.

3 ( +3 / -0 )

No way!!! We (Americans) shouldn’t help this company at all.. Nor should our tax dollars go and help them..

Let China fix their mess…

0 ( +0 / -0 )

Holy Moly.. China growth down to 4.6%!

How many western nations would give their right arm for 4.6%?

-2 ( +0 / -2 )

Mr KiplingAug. 19  10:05 pm JST

Holy Moly.. China growth down to 4.6%!

How many western nations would give their right arm for 4.6%?

Yeah, if you use a reasonable comparison of quarter over quarter annualized it is 3.2% I believe. Not good when you still have so far to go to be a wealthy country.

0 ( +0 / -0 )

No way!!! We (Americans) shouldn’t help this company at all.. Nor should our tax dollars go and help them..

Let China fix their mess

Sigh. China is. The reorganization is happening in China whether the US does anything or not. Do you understand that? Chapter 15 means Evergrande is telling the US courts system in accordance with the terms of the Model Law on Cross-Border Insolvency promulgated by the United Nations Commission on International Trade Law ("UNCITRAL") in 1997, and it replaces section 304 of the Bankruptcy Code and is the US law on dealing with foreign bankruptcies that might affect minor equity holdings in the US.

There are a few bond and share holders of Evergrande in the US who will be affected by the terms of Evergrande's reorganization in China. Chapter 15 allows Evergrande access to the US courts system to address the concerns of these stock and bond holders.

0 ( +0 / -0 )

Marc LoweAug. 19  12:24 pm JST

China is coming and you can't stop it.

They were "coming" 20 years ago. Now they are "going".

Chinese history is nothing but a cycle of regime replacements for thousands of years. The CCP are no exception. Like previous dynasties, the PRC will bring itself down.

0 ( +0 / -0 )

"Too big to fail"

0 ( +0 / -0 )

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