Cross border insolvencies and financial restructurings are remarkably opaque considering we live in the Information Age. The mission of the Centre of Main Interest (the COMI) is to light some candles in the darkness and create a forum for further discussion. The Law Offices of Tally M. Wiener, Esq. are pleased to publish the COMI blog.
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Tuesday, September 4, 2012
China Medical Technologies Files Chapter 15 Bankruptcy
By Phil Milford - Aug 31, 2012
China Medical Technologies Inc., a maker of diagnostic products, filed for Chapter 15 foreign-firm bankruptcy protection in New York, listing as much as $500 million in assets and debts.
China Medical, which makes products to monitor various diseases including cancer, also listed foreign bankruptcy proceedings pending in theCayman Islands, according to a petition posted today in U.S. Bankruptcy Court in Manhattan.
Chapter 15 helps shield overseas companies from U.S. lawsuits and creditor claims while a company continues the process abroad. The company in various documents lists operations in Beijing, Hong Kong and the Cayman Islands.
“To date, the liquidators have been unable to locate any other CMED assets anywhere in the world outside the Cayman Islands,” said Kenneth M. Krys, joint official liquidator, in a filing.
He said unsecured debt includes $276 million in 4 percent senior convertible notes due in 2013; and $150 million in 6.25 percent convertible senior notes due in 2016; both governed by Cayman law and mostly held by Americans.
Krys said in the filing that “it appears” the company’s financial troubles resulted from alleged “fraudulent transfers” of assets, and that the money is missing.
Last month, the company’s American depositary receipts fell 68 percent to $3.50 following a two-week suspension by the U.S. Securities and Exchange Commission, which questioned information accuracy. The shares fell 15 percent in over-the-counter trading to $2.90 in New York today.
The case is In re China Medical Technologies Inc., 12- bk-13736, U.S. Bankruptcy Court, Southern District of New York (Manhattan).