Xinyuan Real Estate’s Hudson 888 faces case dismissal motion

By Sarah Lizee

Olympia, Wash., Feb. 21 – Hudson 888 Owner LLC, a U.S. subsidiary of China’s Xinyuan Real Estate Co., Ltd., is facing a motion seeking dismissal of its Chapter 11 case from mortgage lender DOF II-Bloom Senior LLC and mezzanine lender DOF II-Bloom Mezz LLC, according to documents filed Wednesday with the U.S. Bankruptcy Court for the Southern District of New York.

“These Chapter 11 cases arise out of the repeated and undisputed failures of a real estate developer to pay what it owes, its attempt to skirt the consequences of those failures by exploiting the bankruptcy process, and its ongoing efforts to circumvent both its contractual obligations to its only significant creditor (which is also its only secured creditor) and the rules of bankruptcy,” the lenders said in the motion.

“In essence, this is a simple two-party dispute between one business and the lone secured creditor that holds claims against that business’s sole asset, and accordingly, there is no reason for it to proceed in this forum.”

The lenders said the cases should be dismissed or, alternatively, the automatic stay should be lifted to allow the dispute to proceed in the New York state court where debtors started litigation, where the issues have been fully briefed.

The movants said the facts of the case favor dismissal, since the debtors have no employees and just one asset; there are very few unsecured creditors with small claims compared to the secured debt; the debtors’ property was subject to prepetition foreclosure and enforcement actions; and this is a two-party dispute.

The debtors’ cash flow has severely diminished, and they are unable to make debt payments, the lenders added.

Xinyuan is a Beijing-based real estate developer and property manager with properties primarily in China. New York-based Hudson 888 filed bankruptcy on Jan. 7 under Chapter 11 case number 24-10021.

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