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Zhong Lun Advises Offshore Creditors on Asset Preservation of Mainland Subsidiary of Skyfame Realty (Holdings) Limited
Zhong Lun Advises Offshore Creditors on Asset Preservation of Mainland Subsidiary of Skyfame Realty (Holdings) Limited
Zhong Lun Law Firm has recently advised seven holders of mature bonds, namely, Spring Creek Inc., Merrill Lynch Asian Real Estate Fund Manager Pte. Ltd., DKR SoundShore Oasis Holding Fund Ltd., Chestnut Fund Ltd., PMA Prospect Fund, PMS Focus Fund and Standard Bank Asia Ltd., on the takeover and asset preservation of the mainland subsidiary of Skyfame Realty (Holdings) Limited, a Hong Kong listed company which is the issuer of the bonds.
Skyfame is a red chip real estate company in mainland China. In March 2007, Skyfame issued to Lehman Brothers Commercial Corporation Asia Limited ("Lehman Brothers") US$200 million bonds, which were later purchased by the above creditors while Lehman Brothers was in liquidation. Since Skyfame failed to make timely payment in accordance with the bond covenants, in November 2009, the creditors initiated the offshore takeover proceedings, completely took over the offshore subsidiaries of Skyfame and started the liquidation process. However, enforcement was rather difficult at home due to absence of judicial practices. In the circumstances, Zhong Lun provided innovative legal solutions to the bondholders and helped them reach a settlement with Skyfame.
