Supreme People’s Court of China Orders to Concentrate Civil Litigation Cases Against China Evergrande Group, Affiliates at Guangzhou Intermediate People’s Court

The Supreme People’s Court of China has issued a notice to concentrate all civil lawsuits against China Evergrande Group and affiliated entities to Guangzhou Intermediate People’s Court, a move that signifies the gravity of the situation involving one of China’s largest real estate developers, according to four sources familiar with the matter. Continue reading below as our Asia Core Credit team analyzes the Evergrande Group litigation cases and click here to request a trial for access to our analysis and reporting on hundreds of other stressed, distressed and performing credits.

Evergrande’s hometown court, Shenzhen Intermediate People’s Court, does not have jurisdiction over its cases, which have been elevated to the provincial level as the Guangdong government is coordinating the situation, said the sources.

Other local courts are no longer accepting litigation against Evergrande and affiliates, said two of the sources.

Concentrating cases at the Guangzhou court helps coordinate the court’s response to asset preservation and other pre-litigation measures as well as lawsuits against the company and affiliates filed by creditors, the sources noted. They compared the situation to that of China Fortune Land Development, which saw civil lawsuits against it being concentrated at Langfang Intermediate People’s Court in its home province of Hebei.

The Supreme People’s Court last year ordered that all debt-related lawsuits against Tunghsu Group and subsidiaries be transferred to and concentrated at Shijiazhuang Intermediate People’s Court, even though the company is based in Beijing. The court noted Tunghsu’s strong ties with Shijiazhuang, also in Hebei province, where it was launched and which calls Tunghsu a homegrown company.

Below is China Evergrande Group’s capital structure: