Oceanwide Plaza Developer Ordered To Liquidate In Hong Kong

Hong Kong's High Court has issued an order to liquidate China Oceanwide Holdings Ltd., the developer behind Los Angeles' Oceanwide Plaza, following a similar order in Bermuda in September.

China Oceanwide Holdings was traded on the Hong Kong Stock Exchange until its shares were suspended in late September, filings show.

A hearing before Hong Kong’s High Court was slated to take place in the fall but was adjourned to Dec. 20. At that hearing, the Hong Kong court moved to liquidate China Oceanwide Holdings. The company posted a notice to the Hong Kong Stock Exchange on Wednesday with the news. 

A provisional liquidator from the Hong Kong Official Receiver's Office was appointed. The department is responsible for multiple insolvency functions, “including the role of liquidator and trustee of last resort in the administration of both corporate and personal insolvency cases respectively,” according to its website. 

The liquidation in Bermuda was related to a petition filed by an unknown creditor that provided a $175M loan to Oceanwide. It is unclear which Oceanwide creditor is behind the Hong Kong liquidation, but the company’s financial filings suggest it is Australian construction company Lendlease. 

The January announcement from Oceanwide refers to dates that align with legal actions Oceanwide said the contractor took in an effort to get repaid for completed work. In previous announcements to shareholders, Oceanwide said that Lendlease, the general contractor on Oceanwide Plaza, had filed a winding-up petition in August to liquidate the company in Hong Kong’s High Court on the grounds that it was owed approximately $28.4M.

A representative for Lendlease didn't confirm whether Lendlease was the initiator of this winding-up petition. Representatives for Oceanwide didn't respond to a request for comment. 

Oceanwide is likely to have more than two creditors. In Los Angeles, it is still a defendant in a lawsuit that was filed in 2019 concerning mechanic's liens at its unfinished $1B Oceanwide Plaza in Downtown. 

Next steps in the winding-up process include the receiver taking control of the company and its assets and doing a full accounting of the company's affairs, according to the Official Receiver's Office. Within three months, the provisional liquidator has to reach out to and gather a meeting of the company's creditors and set up a committee and permanent liquidator that will carry out the process of liquidating the company.