China Evergrande seeks Chapter 15 protection in Manhattan bankruptcy court

[Eugene]

Source: Reuters

China Evergrande seeks Chapter 15 protection in Manhattan bankruptcy court

By Jonathan Stempel, Dietrich Knauth and Manya Saini
August 17, 2023 6:32 PM EDT Updated an hour ago

NEW YORK, Aug 17 (Reuters) - China Evergrande (3333.HK), which is the world's most heavily indebted property developer and became the poster child for China's property crisis, on Thursday filed for protection from creditors in a U.S. bankruptcy court.

The company sought protection under Chapter 15 of the U.S. bankruptcy code, which shields non-U.S. companies that are undergoing restructurings from creditors that hope to sue them or tie up assets in the United States.

-snip-

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.

-snip-

Read more: https://www.reuters.com/legal/china-evergrande-files-chapter-15-bankruptcy-us-court-filing-2023-08-17/

Non-paywalled link: https://archive.li/MW2pi

[OAITW r.2.0]

1. Why is this in US Court when the damage was done in China?

[Eugene]

2. Multiple countries are involved, and the filing protects Evergrande's U.S.-based assets.

As stated in the OP article, it gives protection against creditors suing Evergrande in U.S. courts and seizing U.S.-based assets.

The purpose of Chapter 15, and the Model Law on which it is based, is to provide effective mechanisms for dealing with insolvency cases involving debtors, assets, claimants, and other parties of interest involving more than one country.

https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-15-bankruptcy-basics

[OAITW r.2.0]

3. So Evergrande and who knows whatever dubious Chinese investments

bought in and inflated our RE market?