China Evergrande Group sought Chapter 15 bankruptcy protection in New York on Thursday, a move that protects its US assets from creditors while it works on a restructuring deal elsewhere, reports Bloomberg. The Chinese homebuilder’s Chapter 15 petition references restructuring proceedings being carried out in Hong Kong and the Cayman Islands. Its Scenery Journey unit also filed for Chapter 15 protection, along with affiliate Tianji Holdings.
International debt-restructuring deals sometimes require a Chapter 15 filing in the course of finalizing a transaction. Last year, Beijing-based developer Modern Land China also filed for Chapter 15 bankruptcy after failing to repay a $250 million bond and saying it would go forward with an offshore debt restructuring deal.
Evergrande has been working for months to wrap up an offshore debt restructuring plan. Evergrande in April disclosed it didn’t yet have the level of creditor support needed to implement the plan. In July, it received court approval to hold votes on the deal. Meetings are scheduled for later this month.
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