HCMP1366/2025

IN THE MATTER OF Country Garden Holdings Company Limited (碧桂園控股有限公司) and IN THE MATTER OF Section 670 of the Companies Ordinance (Cap. 622)

Case Details

Case ReferenceHCMP1366/2025

CourtCourt of First Instance of the High Court 高等法院(原訟法庭)

Date Published2026-03-19

LanguageEnglish

NCN[2026] HKCFI 1619

Claimant / ApplicantCountry Garden Holdings Company Limited (碧桂園控股有限公司)

Defendant / RespondentNot applicable (scheme of arrangement petition)

JudgesHon Linda Chan J

Claimant CounselMr Jose Maurellet SC

Claimant SolicitorsNot specified in judgment

•Company incorporated in Cayman Islands on 10 November 2006, listed on HKEx since 20 April 2007
•As at 31 December 2024, Group assets RMB 1,035.84 billion, liabilities RMB 984.59 billion
•51.94% of shares beneficially owned by Controlling Shareholder Ms Yang Huiyan
•20 months of negotiations with AHG and CoCom over 13 rounds of restructuring proposals
•Security compensation of US$178 million agreed for Existing Syndicated Loans lenders
•Scheme excludes 82.5% of Group's total liabilities including onshore debts and project financings
•Restructuring would reduce offshore indebtedness by more than USD10 billion
•Estimated recovery under Scheme: 21.1%-54.0% for Class 1, 17.8%-51.1% for Class 2 creditors
•Estimated recovery under liquidation: 9.3%-11.9% for Class 1, 2.8%-6.8% for Class 2 creditors

•Whether the scheme is for a permissible purpose under Section 670 of the Companies Ordinance
•Whether creditors were properly classified and could consult together with common interest
•Whether scheme meetings were duly convened in accordance with court directions
•Whether creditors received sufficient information about the scheme to make informed decisions
•Whether the necessary statutory majorities were obtained
•Whether the scheme is fair and reasonable such that an intelligent honest person might approve it
•Whether third-party releases are appropriately drafted with necessary carve-outs
•Whether the Explanatory Statement adequately explains the effect of the arrangement per s.671(3) CO

•Scheme sanctioned by the Court on 4 December 2025
•Company to amend clause 10.7 regarding indemnity enforceability under applicable law
•Scheme compromises USD14.54 billion of Existing Debts (Existing Loans and Existing Notes)
•Five consideration options available to Scheme Creditors with allocation framework and caps
•Security Compensation Amount of USD178 million payable to Class 1 creditors
•Third-party releases granted with appropriate carve-outs for fraud, gross negligence, wilful misconduct
•Restructuring Effective Date subject to Longstop Date of 31 March 2026
•US Chapter 15 recognition obtained on 2 December 2025

•Explanatory Statements must clearly explain scheme effects in comprehensible monetary terms per s.671(3) CO
•Third-party releases are permissible to prevent ricochet claims undermining restructuring
•Director releases require qualified carve-outs tracking Yuzhou Group precedent
•Complex allocation mechanisms with caps and waterfalls are acceptable if fair and predictable
•Differential treatment of creditor classes can be justified by commercial realities and negotiation timelines
•Foreign companies registered under Part 16 CO can utilize Hong Kong scheme jurisdiction
•US Chapter 15 recognition supports cross-border effectiveness of Hong Kong schemes