(Yicai) Aug. 18 -- China Evergrande Group has recently filed for protection from creditors in a US bankruptcy court in Manhattan. This will give the distressed Chinese property developer, which has amassed liabilities of over USD300 billion, more time to reorganize its debt, analysts said.

If Evergrande’s application for Chapter 15 of the US bankruptcy code is accepted, this will prevent any lawsuits from being filed against it and will mean that its assets cannot be frozen in the US, allowing the developer to focus on finding a way out of its liquidity crisis, Sun Yuhao, a senior partner of Shanghai-based Hiways Law Firm, told Yicai.

Chapter 15 bankruptcy protection allows foreign companies to file for bankruptcy in the US courts if they have assets in multiple countries.

“Bankruptcy protection will provide Evergrande with legal protection during debt restructuring to avoid vexatious lawsuits and liquidation petitions and allow it to continue to operate as normal,” IPG China Chief Economist Bai Wenxi said. “But if during this period the firm is able to reach an agreement with its creditors, it will then enter liquidation proceedings,” he added.

The bankruptcy protection hearing is scheduled for Sept. 20 during which the Manhattan court will determine whether Evergrande is eligible for bankruptcy protection, Bai said.

The developer has already initiated a debt restructuring plan. In March it proposed to repay USD19.1 billion of offshore debt through the issuance of new notes and debt-to-equity swaps. It will hold a creditors’ meetings on Aug. 22 and Aug. 23 to vote on the overseas debt restructuring plan.

Evergrande has been hard hit by a sluggish real estate market and tighter financing requirements. The firm logged a net loss of CNY125.8 billion (USD17.2 million) last year on revenue of CNY230.1 billion (USD31.8 billion), according to data released by the company last month.

To add to its woes. Its main unit Evergrande Real Estate is being investigated by China’s securities regulator for suspected manipulation of its financial data.

Evergrande was suspended from trading on the Hong Kong stock exchange in March 21 last year and will be delisted if it cannot resume trading prior to Sept. 21 this year.

Editor: Kim Taylor