Xinyuan Real Estate unit Hudson 888 files Chapter 11 bankruptcy

By Sarah Lizee

Olympia, Wash., Jan. 8 – Hudson 888 Owner LLC, a U.S. subsidiary of China’s Xinyuan Real Estate Co., Ltd., filed Chapter 11 bankruptcy on Sunday, according to court documents.

Hudson 888’s sole asset consists of a mixed-use real estate project commonly known as the Bloom on 45th Condominium, located at 500 West 45th Street, New York.

Construction of the project was completed in 2020, and condominium sales efforts began in early 2021.

The company said that as a result of the pandemic restrictions, residential sales of the project didn’t meet previous projections. Hudson 888 also cited the successive interest rate hikes and increased mortgage rates putting downward pressure on the condominium sales market.

The debtor defaulted on payments under its loans in late 2022 and throughout 2023. The company said that in April 2023, while restructuring talks were continuing with lenders, its senior and mezzanine loans were sold to affiliates of BH3 Management, LLC.

Hudson 888 said that right after purchasing the loans, BH3 started taking aggressive action against the debtors and attempted to foreclose on their liens securing the loans. The parties were able to reach a forbearance agreement in September, but BH3 later moved to terminate the agreement based on a “material payment default,” the company said.

The debtors started litigation against BH3 in late November and sought a judgment declaring that a 30-day cure period exists under the forbearance agreement. The court had set a Jan. 8 hearing on the matter.

The company said it has been trying to negotiate with BH3 since then.

Hudson 888 said that through the cases, and subject to negotiations with BH3 and approval of the court, the debtors anticipate pursuing a stand-alone restructuring plan that may include one or more potential restructuring scenarios.

The company is seeking approval to use the cash collateral of BH3, to which it currently owes $58.9 million under the prepetition mortgage loan.

In its petition, the company listed $100 million to $500 million in assets and $100 million to $500 million in liabilities.

It did not list any unsecured creditors with claims of $1 million or more.

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

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