Evergrande, once the largest real estate firm in China, is set to face a dramatic end as a Hong Kong court has officially ordered its liquidation. Despite investors globally showing optimism and purchasing Evergrande’s discounted debts after the company defaulted in 2021, the recent court decision signals a different fate. With a staggering debt of over $300 billion, Evergrande’s two-year struggle has come to a head, compelling the court to initiate the liquidation process. The decision prompts legal professionals to scramble in a race to identify and seize any assets belonging to Evergrande that can be sold.
The Hong Kong High Court, on the 12th floor, witnessed a last-minute attempt by Evergrande’s legal team to negotiate an alternative. They argued against liquidation, contending that it would adversely impact Evergrande’s business and not facilitate creditors in recovering their funds. The lawyers sought additional time to reach a settlement with Evergrande’s creditors. However, after a 40-minute deliberation, Judge Linda Chan, overseeing the bankruptcy case, rendered her verdict. She issued an order mandating Evergrande to initiate the winding-up of its operations, citing the company’s failure to present a concrete proposal to the court for an extended period of one and a half years.