Evergrande declared bankrupt amid $300 billion debt crisis

A Chinese court has declared the real estate giant Evergrande bankrupt, marking the collapse of what was once one of the world’s most valuable property companies. The company faced a massive debt burden totaling approximately $300 billion.

The downfall follows the sentencing of founder Hui Ka Yan to life imprisonment for financial fraud. Evergrande’s aggressive business model involved using advance payments from customers to fund new projects, a strategy that faltered when the Chinese government implemented the ‘three red lines’ policy to restrict developer borrowing.

The crisis has left over 1,300 projects unfinished across roughly 280 cities, causing significant uncertainty for millions of homebuyers and investors. While efforts to sell assets to repay creditors have been underway, recovery remains minimal compared to the scale of claims.