China's heavily indebted real estate giant, Evergrande Group, has filed for Chapter 15 bankruptcy protection in a U.S. court. The company cited ongoing restructuring proceedings in various locations, including Hong Kong, the Cayman Islands, and the British Virgin Islands. Evergrande defaulted in 2021 and initiated an offshore debt restructuring program in March. Chapter 15 bankruptcy protection allows a U.S. court to oversee cross-border insolvency cases involving foreign companies undergoing creditor-driven restructuring. The bankruptcy filing raises concerns of contagion within China's property sector impacting broader economic stability, as other developers like Country Garden struggle with debt repayment and bond defaults. China's real estate sector has historically been a significant driver of the economy, accounting for around 30% of its GDP.
