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Latham & Watkins Advises Huachen Energy on Innovative Bond Restructuring and the First-Ever US Chapter 15 Recognition of a PRC Bankruptcy Reorganization Plan

February 14, 2022
Cross-border team advised on the landmark case leading to successful restructuring of the company’s New York law-governed US$500 million senior notes.

Huachen Energy Co., Ltd., one of the largest privately-owned power generating companies in the People’s Republic of China (PRC), has announced that following a substantive hearing of the bankruptcy administrator’s application, the US Bankruptcy Court granted recognition of Huachen’s PRC reorganization plan under chapter 15 of the US Bankruptcy Code, together with other ancillary relief sought by the administrator. The Bankruptcy Court entered an Order Recognizing Foreign Proceeding and Granting Related Relief, and as a result, the reorganization plan in respect of the company (including the releases set out in the plan), as well as the order of the No. 1 Intermediate People’s Court of Beijing approving the plan, are now recognized and given full force and effect in the United States and are binding and fully enforceable in accordance with their terms. 

Latham & Watkins advised Huachen Energy Co., Ltd. on the successful restructuring of its New York law-governed US$500 million senior notes, through a PRC bankruptcy reorganization proceeding, coupled with a consent solicitation exercise, and the first-ever chapter 15 recognition of a PRC reorganization plan in the US. At the end of the hearing, the Honorable Judge Beckerman remarked that she was happy to see another PRC case as there are “not so many of them.” The company will now proceed with remaining steps for implementing the restructuring of the notes, which upon completion will result in the noteholders receiving a restructured note that remains tradable via the clearing systems and the Singapore Exchange, rather than just a (heavily discounted) cash payout.  

Latham represented Huachen Energy Co., Ltd. with a cross-border deal team led by Hong Kong partner Howard Lam, with Hong Kong counsel Tingfei Fan, and associates Flora Innes and Kevin Chow. The US team advising on the chapter 15 application was led by Chicago/New York partner Caroline Reckler, with associates Jeramy Webb and Jon Weichselbaum.