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Partner Christopher Peterson Describes How US Bondholders Will Be Affected by Suntech’s Ba…

March 21, 2013

Partner Christopher Peterson Describes How US Bondholders Will Be Affected by Suntech’s Bankruptcy Filing in Bloomberg

As seen in Bloomberg’s “Biggest Solar Collapse in China Imperils $1.28 Billion.” This article was also published in Businessweek.

Bloomberg reports that investors in Suntech Power Holdings Co. are likely to lose over $1 billion after the company’s main manufacturing unit was pushed into a bankruptcy filing by a group of eight Chinese banks. The manufacturing unit is based in China and subject to Chinese law; however, its parent company is incorporated in the Cayman Islands and subject to New York law. It is uncertain as to how the filing in China will affect Suntech’s US-based bondholders, who are creditors to the parent company.

Kaye Scholer Partner Christopher Peterson believes that US-based creditors must deal with “a fundamental disadvantage that non-Chinese lenders have in a bankruptcy.” According to Peterson, this is because “they would need to get the consent of a Chinese court to get action in China, which the Chinese lenders don’t have to face.”

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