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Comment by hulitu | Hacker News Reader

> China’s property giant Evergrande files for bankruptcy protection in Manhattan

If it is "China’s property giant" why does it "files for bankruptcy protection in Manhattan" ? Why not in China ?

Because the people who lent money to Evergrande did so on condition that the deal was subject to the US’, and specifically New York’s, courts. Presumably because they trusted New York courts more than China’s courts in the event of a conflict.

I don't understand why NY Courts would provide this service to China. Do they get paid for it?

I am sure there are court fees and whatnot, but more importantly, a significant portion of the tax base in New York State and New York City comes from having a well developed and functioning legal/judicial/financial system, including the people working within it to produce predictable and “fair” results.

I put fair in quotes because even though it is obviously subjective, clearly many entities around the world, including China, or investors of Evergrande, however commingled they may be, or whoever else around the world, find it “fair” enough to seek these services in this jurisdiction.

Fair means more fair than the alternative. The whole world suffers from the human factors.

I don't know if they get paid for it, but it is apparently NY law.

https://www.lexology.com/library/detail.aspx?g=e36cde01-e97b...

Bankruptcy is just you admitting to the court/gov you're not going to pay your creditors, and you're ready to face the legal consequence (like reconstruction).

They filed bankruptcy in Manhattan because they are not going to pay their creditors in the US. That's it.

What is it about the topic of global finance that when someone asks a straightforward questions it illicits an answer wrapped in condescension.

I read the question as it implies Evergrande is not a "China's property giant", which it definitely is. But I might read it wrong. I'll edit out my condescending tone.

They filed in Manhattan in particular for very good reason - the venue is extremely good at huge, complex bankruptcies like this. It's non-trivial to unwind these financial obligations, and is really only done in NYC.

https://en.wikipedia.org/wiki/United_States_Bankruptcy_Court...

Companies open regional HQs all the time and they register corporations in those countries. Those are still technically independent legal entities with their own financial paperwork.

This is actually a great question! The United States bankruptcy court in the Southern District of New York is the best equipped place to manage a massive bankruptcy, likely on Earth. Every complex case you've heard of is managed there. It's a huge reason for NYC's success, and they know what they're doing.

If you need to wind down your car dealership, do it in Guangzhou or Monterry or wherever you happen to be. If you need to unwind GM or Enron, you'll do it in the Southern District Court.

https://en.wikipedia.org/wiki/United_States_Bankruptcy_Court...

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