Legal Analysis: Hong Kong Court’s $483.8M Keepwell Award to Tsinghua Unigroup Bond Trustee Continues Narrow Enforceability of Keepwell Obligations; Reiterates Breach Prior to Mainland Reorganization, Lack of Co. ‘Best Efforts’ to Obtain Regulatory Approval Key

Hong Kong Court awards Citicorp International Limited, the trustee (Trustee) of Tsinghua Unigroup Co. Ltd.’s (Tsinghua Unigroup) $450 million 6% due 2020 bonds (Bonds), which benefit from a keepwell and equity interest purchase undertaking (EIPU), $483.8 million money judgment after finding Tsinghua Unigroup failed to meet its obligations under the credit enhancements;

Regulatory approval qualification acts as a defense mechanism. If approvals are not...