CNN
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China’s Evergrande Group filed for bankruptcy in New York on Thursday.
The company was once China’s second-largest property developer by sales, but the firm borrowed heavily and defaulted on its debt in 2021, sparking an ongoing property crisis in the country.
Evergrande filed for Chapter 15 bankruptcy protection, which allows a US bankruptcy court to grant recognition to an insolvency or debt-restructuring proceeding involving foreign countries. Chapter 15 bankruptcy gives foreign creditors the right to participate in US bankruptcy cases and prohibits discrimination against those foreign creditors.
Last month, Evergrande reported that it had lost $81 billion of shareholder money in 2021 and 2022, according to a stock exchange filing. The filing also revealed that Evergrande’s total debts had reached 2.437 trillion yuan ($340 billion) by the end of last year — or roughly 2% of China’s entire gross domestic product.
In March of this year, Evergrande unveiled a multi-billion dollar restructuring plan to pay off its international creditors. The company had more than $270 billion in total liabilities, making the debt restructuring plan China’s largest ever.
This is a developing story. Check back for updates.
