China Evergrande files for bankruptcy in US

China Evergrande has filed for protection from creditors in U.S. bankruptcy court. Real estate giant China Evergrande Group, whose default two years ago precipitated a broader real estate debt crisis in the country, filed for protection from creditors in bankruptcy court in New York on Thursday. The company sought protection under Chapter 15 of the U.S. bankruptcy code, which shields non-U.S. companies undergoing restructuring from creditors who may seek to sue them or freeze their U.S. assets. The Chinese homebuilder’s Chapter 15 petition refers to recognition of ongoing restructuring talks in Hong Kong, the Cayman Islands and the British Virgin Islands. International debt restructuring deals sometimes require Chapter 15 to be filed during the closing of a transaction. Last year, Beijing-based developer Modern Land China Co. filed for Chapter 15 bankruptcy after it defaulted on a $250 million bond and said it would proceed with an offshore debt restructuring deal. Evergrande’s fate has broad implications for China’s $60 trillion financial system and would be one of the country’s biggest-ever restructurings. The sheer size of its liabilities, which exceed $300 billion, means the process is sure to be lengthy.