(April 9): China Evergrande Group’s liquidators are suing Hong Kong Golf Club as they broaden their efforts to recover more money from the defaulted developer’s assets.

Liquidators say the club’s rules may affect their ability to fulfill their duties to maximise recoveries for Evergrande’s creditors, according to a writ seen by Bloomberg News that was filed in Hong Kong’s High Court on March 31. The lawsuit relates to the builder’s membership in the city’s prestigious golf club and rules governing transfers of membership, the writ showed.

The liquidators have considered selling some of Evergrande’s private club memberships including in the golf club, as a way to claw back funds, people familiar with the matter said. But the club’s rules could eat into any money recovered, the argument goes. 

The contention is that the club is asking to charge the transfer fees twice, according to one of the people familiar with the matter — one would be for the possible transfer from the liquidators to any new buyer, and the other for when it changed hands from Evergrande to the liquidators.

A membership transfer is deemed to have occurred when the owner is subject to any winding-up petition or when a court issues a liquidation order, according to the club’s rules seen by Bloomberg News.

That then could incur transfer fees that club rules show could run as high as a quarter of the cost of membership. Memberships can cost up to HK$18 million (US$2.3 million or RM10.4 million) in the secondary market, according to a membership services website. 

Liquidators have cast a wide net in their search for funds, targeting among other things a collection of art work that includes pieces by Monet as well as luxury cars. So far creditors have been left empty handed, with recovered assets being used to support the winding-up procedure and a handful of legal battles.

Evergrande’s liquidators and Hong Kong Golf Club declined to comment.

Liquidators have so far taken control of more than 100 direct or indirect subsidiaries in the group, Bloomberg reported earlier. They have wound-up two key units, CEG Holdings BVI Ltd and Tianji Holding Ltd, and taken control of Evergrande Health Industry Holdings Ltd, which owns more than 50% of the company’s new energy vehicle business. 

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