Chinese developer Sunac China Holdings has filed for chapter 15 protection from creditors in a U.S. bankruptcy court, court documents showed, Reuters reported. Creditors of Sunac China Holdings approved its $9 billion offshore debt restructuring plan on Monday, marking the first approval of such debt overhaul by a major Chinese property developer. Sunac is among a string of Chinese property developers that have defaulted on their offshore debt payment obligations since the sector was hit by a liquidity crisis in 2021, roiling global markets.
Canada's Canopy Growth said yesterday that it would seek bankruptcy protection for its sports nutrition products' segment BioSteel, in the pot producer's latest attempt to rein in costs. Canopy's shares rose 9.6% in early trade after the company said it expects to lower debt by C$95 million over the next two quarters after starting legal proceedings under the Companies' Creditors Arrangement Act in a Canadian court in Ontario and seeking recognition under chapter 15 of the U.S. Bankruptcy Code. The company has been grappling with liquidity issues and has taken several steps to turn profitable including job cuts, exits from some international markets, store closures and divestiture of its retail business across Canada. Canopy first raised doubts about its ability to continue as a going concern in June and reiterated in August. The Smiths Fall, Ontario-based company had been exploring options for a while for BioSteel, which accounted for about 60% of its fiscal first-quarter adjusted core loss. Canopy had said in June it was facing an investigation from the U.S. Securities and Exchange Commission over the reporting of revenue from BioSteel.
Lenders to Indian education-technology company Byju’s have alleged that it covertly transferred $533 million to a Florida-based hedge fund, adding another dimension to their legal feud with one of India’s most highly valued startups, WSJ Pro Bankruptcy reported. A lender lawsuit filed in a Miami court last week alleges Byju’s sent $533 million that should have been in its U.S. affiliate’s bank accounts to Camshaft Capital, described as a Miami-area hedge fund, and concealed the whereabouts of that money from the company’s lenders. The case, filed by the lenders’ agent, Glas Trust Company, seeks to unwind the alleged transfer to Camshaft Capital, to recover any associated fees and to “otherwise ascertain what happened” to $533 million that purportedly served as collateral for a $1.2 billion loan. Byju’s is battling its lenders across several courts after they called defaults against the company earlier this year and sought to take control of its U.S. affiliate, Byju’s Alpha, citing its alleged failure to make required financial disclosures. Byju’s has disputed that it breached its obligations and accused the lenders of manufacturing defaults to try to extort the company for payments.
VanMoof, the Dutch e-bike maker that gained a zealous following but declared bankruptcy last month, has been acquired by Lavoie, an upscale electric scooter company, the firms announced on Thursday, the New York Times reported. Riders of the expensive and technologically advanced VanMoof bikes were left in limbo by the company’s bankruptcy, because the machines are built from proprietary parts that only the company made and many of the bikes’ functions are linked to a smartphone app that runs on the company’s servers. Despite the buzz around the brand, VanMoof had run into financial problems that led to a production backlog and monthslong waits for sales and repairs. But riders will not be completely out of limbo under the new ownership. “What they can’t expect in the first couple of weeks is definitive answers to the problems,” said Nick Fry, the chairman of McLaren Applied, the British motorsports technology company that owns Lavoie. The price of the acquisition was not disclosed, but Mr. Fry said Lavoie would spend “tens of millions” on the transaction as well as in investments over the coming months to “rectify some of the challenges we face.” One of the new owner’s priorities, he added, is improving the availability of parts and repairs, something that had become increasingly difficult for VanMoof owners. Regular bike shops could not — or sometimes would not — fix the bikes. Mr. Fry said he wanted other bike mechanics to be able to fix VanMoof bikes and maybe make the bikes available for sale in retailers other than the shops owned by the brand. Another priority, he said, is to address some of the reliability issues that plagued the bikes.
TV Azteca SAB agreed to negotiate with U.S. bondholders owed $400 million after a U.S. judge warned the second biggest broadcaster in Mexico that it could be forced to participate in a bankruptcy case in New York, Bloomberg News reported. U.S. Bankruptcy Judge Lisa G. Beckerman told the company that it was obvious to her that TV Azteca had to restructure its debt, despite strong resistance from the company. TV Azteca opposes a U.S. bankruptcy and has used court rulings in Mexico to try to block bondholders from collecting on the defaulted bonds. “Your position that there should be no restructuring is not going over very well with me,” Beckerman told TV Azteca. “It is one thing to say that a restructuring should not take place in the United States and it’s another thing to say ‘I’m ducking restructuring.’” Judge Beckerman said that she would delay ruling on whether she should force the producer of some of the most-watched Spanish-language shows to participate in a bankruptcy case in New York brought by US bondholders. Instead, the two sides will try to hire a former federal judge to act as mediator for about 60 days. “It just sounds like it has to have a restructuring,” Beckerman said of the company. That could happen in or out of court, but either way “it means parties will have to recognize that it’s restructuring time.” Lawyers for TV Azteca and the bondholders were in federal court in Manhattan Tuesday for the end of a two-day trial over the company’s request to dismiss the bondholder’s effort to put the broadcaster into chapter 11 bankruptcy. TV Azteca argues that disgruntled creditors can’t force it into bankruptcy because the company doesn’t own or operate anything of substance in the U.S. And even if Beckerman later rules that TV Azteca must participate in the proposed chapter 11, company managers, who are based in Mexico, may refuse to cooperate, TV Azteca lawyer William Clareman told the judge.
China Evergrande Group delayed key votes on its offshore-debt restructuring plan just hours before they were to occur Monday, adding to uncertainty in a protracted process to finalize one of the country’s biggest restructurings ever, Bloomberg News reported. The distressed developer, at the epicenter of a property crisis that’s unleashed record delinquencies in a threat to China’s financial markets, delayed the meetings for the group and some units to Sept. 25-26, it said in a filing. Evergrande cited a desire to let creditors evaluate recent developments including resumption of trading in its stock, as well as the terms of the proposals. Its shares slumped as much as 87% in Hong Kong trading following a 17-month halt, becoming a penny stock. “Not enough votes is probably the reason for the delay,” said Ting Meng, a senior credit strategist at Australia & New Zealand Banking Group, adding that it is uncertain whether the meeting will be further delayed later. While resumption of share trading helps creditors gauge value as they think about how to vote, the sharp drop in the stock price has likely given them more concerns, she said. Investor patience is running thin. Evergrande shot past previous targets in unveiling its restructuring plan, and global money managers are still seeking clarity on what they might recover some 20 months after the firm’s first public bond default. The last-minute change Monday is also the second such abrupt delay from a major distressed Chinese developer in just days, after Country Garden Holdings Co. pushed back voting Friday on its request to extend payment on an onshore bond.
London-based digital-first healthcare platform Babylon Health has filed for chapter 7 bankruptcy for two subsidiaries — Babylon Healthcare and Babylon Inc. — as it shuts down core U.S. operations, according to documents filed on Aug. 9 in a Delaware bankruptcy court, Becker's Hospital Review reported. The filing comes shortly after a planned combination Babylon's core operating subsidiaries with MindMaze, digital neurotherapy company, collapsed. Both Babylon subsidiaries list hundreds of creditors with liabilities between $100 million and $500 million, according to the filing signed by COO Paul-Henri Ferrand. After administrative expenses are paid, only secured creditors — where the debt is backed by collateral — will be able to get paid. Earlier this month, Babylon closed its Austin, Texas, headquarters, laid off 94 employees and abruptly canceled patient appointments.
China Evergrande, which is the world's most heavily indebted property developer and became the poster child for China's property crisis, yesterday filed for chapter 15 protection from creditors in a U.S. bankruptcy court, Reuters reported. An affiliate, Tianji Holdings, also sought chapter 15 protection yesterday in Manhattan bankruptcy court. Evergrande's filing comes amid growing fears that problems in China's property sector could spread to other parts of the country's economy as growth slows. Since the sector's debt crisis unfolded in mid-2021, companies accounting for 40% of Chinese home sales have defaulted. The health of Country Garden (2007.HK), China's largest privately run developer, is also worrying investors after the company missed some interest payments this month. Evergrande recently had $330 billion of liabilities. A late 2021 default triggered a string of defaults at other builders, resulting in thousands of unfinished homes across China. In a filing in the Manhattan bankruptcy court, Evergrande said it was seeking recognition of restructuring talks under way in Hong Kong, the Cayman Islands and the British Virgin Islands. Evergrande has said creditors may be able to vote this month on a restructuring, with possible approval by Hong Kong and British Virgin Islands courts in the first week of September. The company proposed scheduling a chapter 15 recognition hearing for Sept. 20.
