Months after China Evergrande ran out of cash and defaulted in 2021, investors around the world scooped up the property developer’s discounted i.o.u.’s, betting that the Chinese government would eventually step in to bail it out.

On Monday it became clear just how misguided that bet was. After two years in limbo, and with over $300 billion in debt, Evergrande was ordered by a judge in Hong Kong to liquidate, a move that will set off a race by lawyers to try to find and grab anything belonging to Evergrande that can be sold.

In a small courtroom on the 12th floor of Hong Kong’s High Court building, Evergrande’s lawyers pushed for a last-minute deal. They argued that a liquidation would hurt Evergrande’s business and not help creditors get their money back. They wanted more time to try to make a deal with Evergrande’s creditors.

But after 40 minutes of debate, Linda Chan, the bankruptcy judge presiding over the case, made her decision to issue an order telling Evergrande to wind up its operations, citing the company’s inability to bring a concrete proposal to the court for one and a half years.

“I think it would be a situation where the court would say enough is enough,” Ms. Chan said.

The order means that Evergrande, which has been limping along for two years, unable to pay its debts or function normally but still in operation, will now likely face a protracted period dismantling a massive business with projects that span hundreds of cities and unrelated businesses like an electric vehicle company.

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