The United States Bankruptcy Court for the Southern District of New York (Court or New York Court) has denied Xinyuan Real Estate Company Ltd. (Xinyuan or Debtor)’s motion to dismiss an involuntary chapter 11 case filed against it by a group of noteholders.
The ruling, made on March 3, 2026, has implications for the interplay between United States bankruptcy proceedings and foreign schemes of arrangement, particularly when the foreign scheme is at an impasse.
Below, we discuss the background of the decision and its practical implications for foreign companies.
In re Caesars Entertainment is one of the major-and-successful bankruptcy cases in the history of these United States.
The Caesars bankruptcy was filed on January 15, 2015, in the Northern Illinois Bankruptcy Court with $18 billion of debt. It achieved a confirmed plan two years later (on January 17, 2017). The bankruptcy case finally closed within the last six months (on December 3, 2025), and its last docket entry [No. 9968] is dated January 12, 2026.
Mediation Controversy—Background
A bankruptcy judge has ruled that a debtor can satisfy the Bankruptcy Code’s rehabilitation standard by selling its assets as a going concern and thereby avoid conversion from chapter 11 to chapter 7. In the same decision, the court denied a motion seeking the appointment of what the movants called an “examiner with expanded powers.” In re Deqser, LLC, Case No. 25-10687, 2026 Bankr. LEXIS 1004 (Bankr. D. Del. Apr. 22, 2026).
In Insight Terminal Solutions, LLC v. Cecelia Financial Management (In re Insight Terminal Solutions, LLC), 148 F.4th 869 (6th Cir. 2025), the Sixth Circuit reversed a bankruptcy court’s exclusion of deposition testimony in a debt-versus-equity recharacterization dispute. While the majority resolved the appeal on evidentiary grounds, Judge Eric Murphy’s concurrence questioned whether bankruptcy courts have any federal authority to recharacterize loans as equity.
In these uncertain times, some companies are exploring ways to restructure their existing credit facilities to navigate business challenges, including cash flow shortages. Highly leveraged companies that are taxed as partnerships, such as the portfolio companies of private equity funds, must carefully consider the significant tax consequences associated with restructuring and modifying their debt obligations, especially if the company is or is likely to be in financial distress.