Judge Strips Control of Bankruptcy From Exiled Chinese Businessman

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A judge declined to end exiled Chinese businessman Guo Wengui’s personal bankruptcy, siding with the Justice Department and some of his creditors who asked that a neutral party be brought in to take charge of his finances, WSJ Pro Bankruptcy reported. Judge Julie Manning of the U.S. Bankruptcy Court in Bridgeport, Conn., yesterday ordered that an independent trustee be appointed to take over Mr. Guo’s chapter 11 case and work with his creditors on a plan to pay his debts and potentially resolve civil lawsuits against him. The ruling is a blow to Mr. Guo and his largest creditor, Pacific Alliance Asia Opportunity Fund LP, which asked Judge Manning to dismiss the case so the investment fund could resume litigation against him. Pacific Alliance seeks to collect on a $116 million judgment against Mr. Guo over an unpaid loan. Mr. Guo filed for personal bankruptcy in February after a New York judge ordered him to pay an additional $134 million fine for moving a 152-foot yacht called the Lady May out of the New York area, and out of Pacific Alliance’s reach, in violation of a court order. Pacific Alliance has called Mr. Guo’s bankruptcy a “sham” and argued in a May court filing that the appointment of a chapter 11 trustee wouldn’t result in a better outcome for creditors. But Pacific Alliance said it would support the appointment of a trustee if Judge Manning declined to dismiss the bankruptcy. Mr. Guo, also known as Kwok Ho Wan, agreed in May to have his bankruptcy case dismissed, saying he couldn’t afford the mounting legal costs. A prominent critic of China’s Communist Party, Mr. Guo fled the country in 2014, took up residence in New York and forged ties with fellow China critic Steve Bannon, an ex-political adviser to former President Trump. Mr. Guo has been dogged by litigation with Pacific Alliance over a business debt he allegedly guaranteed. Read more.