By Julie Chu From South China Morning Post

Rightway is a company incorporated on the Cayman Islands, developing properties mostly in Dalian and Beijing.

A mainland property developer that is indebted to the tune of more than US$547 million has avoided being wound up by a group of creditors, according to a High Court judgment.

Majority lenders to Rightway China Real Estate secured an injunction to stop four creditors proceeding with winding-up action against Rightway and three of its related companies.

The four – Fortunesea (Cayman), Goldman Sachs (Asia) Finance, Goldman Sachs Re Investments and Indus Structured Finance Master Fund, LP – lent money to Rightway along with 12 other creditors in a collective loan in 2007.

Those four could not pursue the lawsuit as the loan deal they signed in 2007 stated clearly that the majority lenders were the ones to decide what enforcement proceedings to take, Mr Justice Jonathan Harris noted yesterday.

That agreement was “in the absence of an express provision giving individual lenders a right to take independent enforcement proceedings”, Harris said.

Rightway is a company incorporated on the Cayman Islands, developing properties mostly in Dalian and Beijing. Company chairman Fu Yanbin was a property tycoon.

But Rightway’s debts rose to US$612 million in October 2013 amid the central government’s efforts to deflate the property bubble and curb bank lending.

Its 16 lenders have disputed over the recovery of their money. The four creditors applied for the winding-up of Rightway and three related firms on the Cayman and British Virgin islands.

But the majority lenders asked the court to restrain the four from continuing the proceedings, saying the loan deal allowed an administrative agent to recover the funds from Rightway under the instruction of the majority lenders but not an individual lender.

IMAGE: Rightway is a company incorporated on the Cayman Islands, developing properties mostly in Dalian and Beijing. Company chairman Fu Yanbin (above) was a property tycoon. Photo: SCMP Pictures

For more on this story go to: http://www.scmp.com/news/hong-kong/law-crime/article/1844607/mainland-property-developer-avoids-winding-after-hong-kong