4 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 FEBRUARY 2024 BRI EFS On the morning of Jan. 29, the Hong Kong High Court issued a windingup order for China Evergrande Group, signaling the company’s eventual dissolution following the future disposal of assets and repayment of debts. It was a judgement nearly two years in the making. On June 24, 2022, Top Shine Global, serving as the petitioner, first submitted a request for China Evergrande’s liquidation to the Hong Kong High Court. Following this, the court approved seven postponements requested by Evergrande, largely due to the active progress in its overseas debt restructuring efforts. However, in the lead-up to the January 29th hearing, the prospects for a further delay diminished due to Evergrande Group’s controller, Hui Ka Yan, facing compulsory legal actions for alleged criminal activities, coupled with the absence of a fresh, feasible debt restructuring plan. Consequently, the court proceeded to declare the company’s liquidation on the same day. Subsequently, the appointed (provisional) liquidators will assume control from the existing management team. In the wake of the Hong Kong High Court’s liquidation order for China Evergrande, the conglomerate’s fragile domestic business and operations are under intense scrutiny. Historically, Hong Kong-listed entities of mainland real estate firms have predominantly acted as financial conduits, mobilizing capital through stock issuances or dollar-denominated bonds. These funds, with minor exceptions for overseas acquisitions, have been repatriated to fuel construction projects within China. Chen delineates the connection between China Evergrande and its mainland counterparts into two primary categories: equity investments and creditordebtor dynamics. Specifically, China Evergrande has either entered Evergrande’s numerous project companies through investment, becoming their shareholder, or formed a creditor relationship through loans. In the former case, the liquidators will replace China Evergrande as shareholders, while in the latter, the liquidators have the same rights as domestic creditors. Either way, Chen underscores that the liquidators’ actions will be bound by Chinese legislation, limiting the impact on Evergrande’s overall operations. Complicating matters further, the liquidators are braced for extensive cross-border legal endeavors, navigating the intricacies of mutual recognition and collaboration between mainland China and Hong Kong’s bankruptcy protocols. The 2021 Record of Discussions on Mutual Recognition and Assistance in Bankruptcy Proceedings between Mainland China and Hong Kong exemplifies this cooperation, allowing mainland courts to acknowledge the mandate of Hong Kong liquidators. Nonetheless, this initiative is currently limited to Shanghai, Xiamen, and Shenzhen. The quest to assert claims on behalf of China Evergrande beyond these locales faces a convoluted path, marred by legal ambiguities and potential impediments in rights enforcement. Chen reveals that Evergrande’s subsidiaries across various regions are already encountering bankruptcy liquidation petitions from mainland creditors. The ideal outcome for creditors, Chen notes, is to expedite Evergrande’s transition into a restructuring phase. Yet, the path is fraught with challenges: initiating bankruptcy proceedings prior to fulfilling the “guaranteeing housing delivery” commitments poses a significant hurdle. Additionally, the ongoing slump in the real estate sector, coupled with the hefty financial injection required for Evergrande’s revival, complicates the search for willing investors. However, the unfolding liquidation of China Evergrande could serve as a pivotal “catalyst” within the broader narrative of the Evergrande crisis. It opens the door for the liquidators, possibly at the behest of international creditors, to seek bankruptcy proceedings for Evergrande in mainland China—a move that could have far-reaching implications. EVERGRANDE LIQUIDATION COULD TRIGGER CROSS-BORDER LEGAL CHALLENGES, ECONOMIC FALLOUT 中国恒大清盘可能引发跨境法律挑战 1月29日上午，香港高等法院 对中国恒大颁布清盘令，标志着中国 恒大将在资产处置、清偿债务后注销 解散。 根据公开信息，2022年6月24 日，佳盛环球作为呈请人，第一次向 香港高等法院申请对中国恒大进行 清盘。此后法院曾七次接受中国恒大 的延期申请，主要基于其境外债务重 组正在积极推进之中。一旦债务重组 成功，企业将获得存续机会，法院因 此给予其机会及时间。 但在1月29日的聆讯前，由于恒 大集团实控人许家印已因涉嫌违法 犯罪被采取强制措施，债务重组也没 有新的可行性方案，再次延期希望渺 茫。最终法院在当天宣布了清盘结果。 下一步，（临时）清盘人将从管理 层手中接管企业，管理层同时需配合 清盘人移交资料，便于其掌握企业资 产，查清负债，后续清理和处置资产， 公平清偿各类债权人。 当天，恒大集团的另外两家香港 上市公司，恒大汽车和恒大物业暂时 停牌。北京德恒（重庆）律师事务所主 任陈昊律师告诉ALB，这是基于香港
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