Bermuda Court Orders Liquidation of China Oceanwide

A Bermuda court has ordered the liquidation of a Chinese development firm whose subsidiary sank $1.1 billion into an uncompleted hotel, condo and retail project in Downtown Los Angeles.

The Caribbean court appointed liquidators of Beijing-based China Oceanwide Holdings, whose Oceanwide Holdings didn’t complete the three-building Oceanwide Plaza at Figueroa, Flower, 11th and 12th streets in South Park, Bloomberg reported.

Trading of the company’s stock on Hong Kong’s stock exchange was suspended Monday.

An unidentified creditor had filed a winding-up petition in Bermuda in June of last year to force the liquidation of China Oceanwide because of an unpaid $175 million loan. The financing involves a pledged New York property and secured shares.

A loan for that amount was made for the project by New York-based DW Partners in 2019, according to Bisnow. It appears that $6 million of the loan was repaid, leaving a $169 million balance, according to public documents.

In July of last year, The Real Deal reported that a mysterious LLC had purchased the note secured by the property for $169 million.

China Oceanwide Holdings ran into strong headwinds in the U.S. after sinking $3.5 billion into real estate investments, Bloomberg reported.

Lenders last year seized control of a New York property where China Oceanwide planned to build one of lower Manhattan’s tallest towers after it failed to make its mortgage payments.

The firm said 18 months ago it was trying to raise cash by selling properties to resume construction of the $2.3 billion Oceanwide Plaza, which stalled in early 2019, leaving in the lurch a 2 million-square-foot hotel, condo and retail project.

China Oceanwide Holdings has defaulted on a $157 million loan tied to Oceanwide Plaza, The Real Deal reported.

In July, Australian developer Lendlease, the former general contractor for the Downtown project, filed a statutory declaration demanding repayment of $28.4 million, according to Bisnow, while threatening to file a winding-up petition.

Lendlease also challenged a ruling that would have given lien priority to EB-5 investors in the Oceanwide Plaza project, allowing them to be repaid before Lendlease and other contractors.

Oceanwide faces $220 million in lawsuit liabilities on the hotel and residential complex as detailed in a September 2022 filing, according to Bloomberg.

— Dana Bartholomew