The developer was once considered too big to fail, but it over-borrowed and was hurt by China’s weakening property market.
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Evergrande, once China’s biggest property developer, was ordered by a judge in Hong Kong to liquidate, spelling the end for what was once a titan in property development.
Following years of overborrowing, the company officially ran out of cash and defaulted in 2021, leading to a feeding frenzy from investors around the world who bought up the firm’s discounted I.O.U.s, hedging their bets that the Chinese government would bail them out.
Those bets were revealed to have been misguided, as Hong Kong bankruptcy judge Linda Chan issued a decision ordering Evergrande to cease operations, citing its inability to present a viable path forward to the court over the course of one and a half years, according to a report in The New York Times.
“I think it would be a situation where the court would say, enough is enough,” Chan said.
Evergrande will now be forced to dismantle its massive business operations, which include projects in hundreds of cities in China and non-real estate interests such as an electric car company. It has spent the past two years unable to pay its debts or function effectively.
Evergrande, once considered too big to fail, fell victim to China’s teetering property market, which saw sales of new homes fall 6 percent throughout 2023. The company racked up a massive amount of debt during a property boom for the country but found itself unable to pay back its more than $300 billion in debt as property sales fell and the company took money for apartments that had not been finished, leaving thousands of homebuyers without the…